Buying distressed rental properties is one strategy for making money as a property investor. Properties that are especially old or in foreclosure can often be purchased at steep discounts. Even fixing up your own rental properties can bring a high return on investments and create a greater draw to your property. These renovations can help with the increase in its rent value. For us at Keyrenter Tulsa, we understand the impact renovations can have on the value of properties. We work on renovations often to help push rents up while providing higher quality rental homes for our residents. Here are a few ways you can renovate your properties with examples of how we have done so.
Kitchen and Bathroom Updates
Bathrooms and Kitchens are key components to renting or selling a home. By renovating and updating them, you will be able to find a tenant or buyer more easily. In some situations, it may be necessary to gut the entire kitchen or bath, but upgrades like this go a long way and increase rent values. These types of renovations are the money makers and worth every penny! At one of our properties, we did exactly this and were rewarded greatly. You can see the difference our renovations made.
It may be necessary to reframe parts of the property, depending on its condition. Even if a property is not in bad shape, reframing a property to add another bedroom and/or bath can dramatically increase the price at which you are able to rent the home.or. The house displayed throughout this blog a jumbled mess when we purchased it. After reframing the home’s back area, we also adjusted the floor plan, creating hallways and closets to develop a 3 bed, 2 bath home where every room has a specific purpose. In addition to reframing the home, we hung new sheetrock, which has livened up the home and gives an appearance of being brand new.
New Plumbing and Electrical
If the home you seek to renovate is in especially bad shape or is simply old, it may be necessary to run all new electrical and plumbing. Though the price might scare you off, some rebuilds require it. In our sample renovation project, we ran all new electrical wiring, new plumbing, and new gas lines, as well as an all-new HVAC system. Doing this has brought more life to the property and will help avoid ongoing maintenance issues over the next decade, at least.
Including new roofing isn’t always necessary, though it may help ward off leaks that can undo other work that you’ve recently completed. Updating a roof can create a great impact on the overall look of the home, especially if the roof was in particularly rough shape off prior to the start of renovation efforts. For the sake of our project. Reroofing was a logical part of the framing exercise of the master bedroom where we annexed two lean-tos that were previously used as external storage areas. By doing this, we were able to add a few hundred square feet to the home, which we believe influenced the rent price.
Undertaking renovation projects for your rental properties can make a huge impact on the value of the home and can dramatically improve your equity position in the asset. It can greatly influence the price at which you are able to rent the property, reduce the days the property remains vacant and can improve the attraction of high-quality tenants. At the same time, be judicious in your expenditure during renovations. Stay away from easily destroyed materials, and avoid replacing what could have been repaired. Finally, be certain you aren’t improving the home beyond what might be considered a reasonable rental for the neighborhood; no need to gold-plate a class C home when it can simply be made respectable. That is where the yield lies.