If you want to maximize the profits on your rental property investment, it is essential to create a consistent and reliable budget for property renovation. Although rental properties do not usually require a complete overhaul, it is important to identify areas where you can allocate your renovation budget to have a significant impact on the Eastpointe market and increase the rental value.
Property investors propose allocating renovation funds based on percentages of main property features:
- Kitchen: 30%
- Bathroom: 20%
- Exterior: 20%
- General Improvements/Other: 30%
Post checking the areas of your property that fall under these percentages, take into consideration the aggregate market price of the property and take away a percentage of it. For example, if you have a $40,000 property renovation budget based on 10% of a $400,000 property value it would look like this:
- Kitchen: $12,000
- Bathroom: $8,000
- Exterior: $8,000
- General Improvements/Other: $12,000
When it comes to customizing your property for future Eastpointe tenants, it is essential to consider your core demographic and what will add value. To start with, create a list of each room and feature of your property and use your allocated renovation budget to determine which area needs improvement the most.
Most property investors tend to focus on the kitchen or bathroom when it comes to maximizing their renovation budget. However, it is advisable to keep the expenses as low as possible and invest in the areas that need more attention. For instance, you could keep the main kitchen body and replace the floors, sink, faucet, add new appliances, and paint the cabinet doors or add new handles. Bathrooms, on the other hand, can remain the same with their walls and layout. Still, you could replace the shower head(s), toilet, or vanity to give them a modern and clean look. If there are items you don’t want to keep, sell them in the second-hand market to raise funds for buying new items. Alternatively, you could buy from a community online classifieds section or the second-hand market to get lower-cost items for your kitchen, bathtubs, windows, and doors.
Although a full remodeling can boost the value of your Eastpointe property, overcapitalizing can be a problem, especially when rental values fluctuate depending on the market. Therefore, make sure that your renovation budget aligns with your goals and that you don’t invest in expensive renovations that are not necessary to attract higher rent.
In determining the most important components to focus on for your property renovation budget, we have found that these items tend to increase rental value:
- Updating the kitchen and bathroom to be more modern
- Adding blinds/window dressings and floor coverings
- Including privacy features
- Outdoor living areas and fencing
- Ease of access to rooms
- Natural lighting in the home
The most important detail in renting to Eastpointe tenants is to have the nonpareil presentation that you can to engender an auspicious estimation with your tenants-to-be that will remain even after they opt to live in your property. Furthermore, in expectation of speaking to you, soon-to-be tenants will, as often as not, drive by the property itself to watch the condition. If they are roused, then they will contact you for more information. If not, they may move along to the next rental property. As such, curb appeal can help woo and engage quality tenants. An adequately planned property renovation budget will result in careful consideration of all the costs necessary to allocate the right resources and time to what counts most to your tenants in the making.
Would you like a free assessment of your rental property, or do you have any questions from Real Property Management Metro Detroit? Contact us online or call us at 248-808-6550 today!
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