Outdated fixtures. Monthly phone calls from tenants about broken-down appliances and other repairs. Carpet that’s getting close to the seven-year mark with pet-owning tenants most of that time.
How do you know if these things are signs that it’s time to remodel your rental property?
Whether you’re a new or experienced landlord, it may be easy to tell when the properties you own could use a refresh, especially if they’re older locations that are starting to show signs of their age. But how can you tell if you need to simply freshen up the place with a few coats of paint or if a fuller remodel is your best move?
Here are some things to think about that’ll help you make that decision. It may be time to remodel if:
You want to gain a competitive edge in an increasingly competitive market.
The 2021 housing market is on fire. It’s a seller’s market where homes are often selling faster than normal at above the asking price. Rentals.com says with fewer homes available at higher prices, the competition in the housing market is at an all-time high. And it’s not just affecting homeowners.
The rental housing market is also more competitive, so tenants are being choosier. Landlords need to know that potential renters are more likely to be attracted to rental units that have modern fixtures and appliances, energy efficient lighting, and updated décor.
If you’re a landlord and one of your properties is aging, a remodel could give you the competitive edge you’ve been looking for in the current market.
You want to attract higher-earning tenants
Having a stronger competitive edge means attracting more of the quality tenants you’d like to have in your units. It’s not just low earners who are renting these days, by the way.
So, if you’re looking to get the attention of higher-earning renters who stay with you over time, you’ll likely be more successful when your property has a modern feel and needs minimal upkeep.
High quality tenants prefer not to deal with aging appliances and broken-down inner workings of the home. Attract them with a remodel that provides the best of 21st century conveniences in a warm, welcoming, and refreshingly updated environment.
You’re spending excessive funds on repairs and maintenance
If you’re already dealing with a lot of plumbing, electrical, or other extensive problems, you can feel confident upgrades are in order. Remodeling rental property can seem like a big investment, no doubt. But patchworking the repair of aging pipes and light fixtures can end up costing just as much or more over time.
If you’re already spending more than you budgeted on monthly repairs, why not plan for a full remodel and get the property in the best condition possible for future tenants?
The home décor has become outdated and could use sprucing up
Speaking of good condition, do any of your rental units still have orange shag carpeting from decades ago or floral wallpaper lining the dining room walls?
We know there are renters out there who like vintage, but when the décor in a rental property has gone well past its prime, it’s time to upgrade. And for all the reasons we’ve already mentioned. You want to attract higher-earning tenants and be able to keep the property rented year in and year out. Updating outdated décor will help you do that.
New hardwood floors in place of that shag carpeting. Modern appliances instead of a worn-out stove and refrigerator. New energy-efficient windows. All can add value to the home, up the satisfaction your current clients feel, and attract high-quality tenants in the future.
If the décor in your rental property has lost its shine, go ahead and make plans for a remodel.
You’re between tenants
There’s no better time to evaluate the state of your rental property than right after a tenant moves out. When no one’s in the home, it’s easier to bring in all the workers you need to repair and replace worn out pipes, cracked toilets, leaky faucets, and more.
You can update floors, repaint every wall (and even touch up the ceilings!), move those age-old appliances out, and move in that bright new stainless-steel stove, dishwasher, and refrigerator… all without worrying about disrupting Zoom meetings for employees working at home or interrupting parents helping their kids with schoolwork.
If you’re between tenants and you’ve been considering remodeling the property, do it while there’s no one in the unit. You’ll be glad you did. And future tenants will thank you — they’ll love the updated space.
You’re looking to increase the rental property’s value to sell it
Finally, if you’re thinking about selling one of your rental properties, a remodel may be in order. Maybe you’re tired of being a landlord or you want to invest in a new property on the other side of town — whatever your reasoning, think about all that we’ve discussed above when you’re considering preparing the property to sell it.
Are you having a lot of problems that need attention every month — plumbing, electrical, or other? Are the kitchen, living room, and bathrooms decorated with out-of-date trends that faded away decades ago?
If you’re hoping to get the most value from the property when you sell it, consider investing in a remodel first so you can sell at a higher price, recoup the money you invested, and have enough to purchase additional properties in other locations.
Remodeling your rental property has a lot of benefits, and you can take advantage of those benefits when you’re between tenants, when you’re preparing to sell the home, or when you simply want to up the value of the property to get the competitive edge that’ll attract higher-earning tenants.
If you need assistance keeping your rental properties well maintained and operating efficiently, be sure to reach out to the Gaskill Realty team and ask us about our rental management services. We’ll help you maximize your profits without sacrificing on service.