Key Takeaways
- Compare your property with similar Fargo and surrounding area rentals before choosing renovations so your investment aligns with what the local market expects.
- Prioritize upgrades that balance appearance, durability, maintenance needs, and the rental price your property can reasonably support.
- Evaluate who pays utilities before investing in energy-efficiency improvements, since the financial benefit may differ for owners and residents.
- Consider the long-term maintenance and replacement costs of appliances, flooring, fixtures, and other improvements rather than focusing only on upfront expenses.
- Use inspections and property condition assessments to identify improvements that may protect the property’s value alongside cosmetic upgrades.
Renovating a rental property differs significantly from renovating a home that you are going to occupy. While in your owner-occupied home, you can make selections based on your preferences, but things need different considerations in a rental unit.
There needs to be an explanation for spending every dime here. Is it for getting a better clientele? Will this allow increasing the rental revenue? Will this decrease the vacancy rate? Will it help save on maintenance costs?
Below are five types of renovations from Personal Touch Property Management that are worth your consideration.
1. Perform a Kitchen Makeover
The kitchen is still one of the top places to renovate in a rental property. When prospective tenants walk through the door, they make their minds up within seconds, and the kitchen has a major part in that decision. But there is a drawback: over-renovation.
A rental kitchen does not have to be as good as a high-class private home. Putting the best finishes in a neighbourhood where rental kitchens are quite basic gives you a beautiful rental, but it can never earn enough rent to cover that expense.
The idea here is to make improvements that significantly affect the kitchen but at the same time do not increase your costs unnecessarily. Depending on the state of the kitchen, this can mean just painting the cupboards, replacing door handles, putting in a new backsplash, installing some new countertops, upgrading the lighting, or buying new appliances.
2. Turn a Regular Bathroom into a Selling Point
Bathrooms can also be subjects of special renovation that can raise the rental value.
A neglected-looking bathroom can make an otherwise desirable property seem destroyed and old. On the contrary, a bathroom in a modern style can significantly increase the value of the whole property.
You don’t always have to rip out walls or do a complete overhaul on the plumbing. Replacing the existing faucet, putting in a new vanity, mirrors, fixtures, new lights, new grout in the tub, and perhaps swapping the toilet can go a long way in making an old bathroom look much better.
Replacing the bathroom tile might not be necessary if the tile is in good shape. If the tile has cracks or is severely outdated, then it definitely needs to come out.
One also has to consider ventilation and moisture. A bathroom that develops mold or chronic dampness will end up being a headache for the landlord and tenant.
3. Consider Durable Flooring
An important indication of an old house is dilapidated flooring. Worn carpets, chipped tiles, and damaged surface treatments–all these conditions will give potential tenants so many reasons to think of other maintenance issues that might be hidden inside the property.
For that reason, flooring replacement will change a house’s look and potential tenants’ perception about the home’s quality for the better. However, rental flooring should demand a bit more than just looking nice when moving in.
Given that, one should look for the most durable kind of flooring and those that require easy maintenance and are repairable as well. In rentals, consider strong types, for example, high-quality vinyl plank, laminate, and tile. The selection of the specific type of flooring, of course, depends on the location, tenant types, season, and rental segment.
When targeting tenants who are likely to have pets, for example, floors with scratch-resistance characteristics and ease of cleaning can be critical.
The right flooring should be attractive enough to achieve target rent, while it should also be durable enough to withstand tenant activity.
A property with new flooring can be photographed better, shown better, and more move-in ready to potential tenants. These little advantages can add up to less time a property is sitting empty (and costing you money). Plus, when a property is vacant, there is a daily price attached.
4. Add or Improve Laundry Facilities
Having laundry is one of those features that tenants won’t really mention until they experience life without it. A rental property that has on-site laundry facilities can provide a significant competitive advantage in certain markets where units of comparable quality do not have that offering.
If the property does not have laundry facilities, check if there is an option to add them. If a washing machine and dryer already exist, think about what improvements could be made in terms of storage, ventilation, or overall layout. Even a small laundry area can be a valuable asset.
However, landlords must make appliance selections carefully. The most expensive product is not always the best choice for investment. It’ll often be necessary to assess reliability, energy efficiency, warranty terms, maintenance, and replacement costs of an appliance.
A feature that affects rental price positively while requiring constant repairs is probably not worth the investment. More generally, people will pay for comfort and convenience.
5. Enhance Energy Efficiency
Renovations aimed at improving energy efficiency may indirectly impact rental income. Some of the renovations may include LED lighting, energy-efficient appliances, insulation improvements, new windows, ceiling fans, new heating/cooling units, or smart thermostats.
The extent to which this type of renovation contributes to financial profit is determined by who pays for utility bills. If tenants pay electricity and water bills, then energy-efficient work acts as an attraction factor because it lowers overall living expenses.
However, if the landlord pays for some or all utility bills, then energy-efficient renovations will lower operating expenses and consequently increase net profit.
Bottom Line
Whenever renovations of a rental property are undertaken, there should always be a goal. These renovations should be made to bring in future tenants, maintain rental income, lower operating expenses, increase retention rate, or ensure the building’s condition over the long run.
Because of that, when chosen wisely, the five renovations above–kitchen renovations, bathroom renovations, resilient floors, laundry amenities, and efficiency upgrades–are probably going to be impactful investments.
That being said, don’t renovate just because another property owner did. First and foremost, study your market, consider competing properties, know what tenants expect from your rental price, and discover what is missing from your unit compared to others.
Do all of this and more with the help of our experts at Personal Touch Property Management.
Frequently Asked Questions About Renovations for Your Rental Property
How Do I Determine Whether a Rental Renovation is Worth the Cost?
Start by identifying the specific problem the renovation is meant to solve, then compare the expected benefit with the total investment. For example, an upgrade might be intended to improve marketability, support the property’s rental positioning, reduce recurring maintenance, or address an aging component.
Should I Renovate a Rental Property Before Listing it?
Not necessarily. The right approach depends on the property’s condition, comparable rentals, available budget, and the improvements needed to make the property competitive. Some properties may benefit from targeted cosmetic updates, while others may need repairs or larger capital improvements before they are ready to market.
What Should I Consider When Choosing Materials for a Rental Property?
Rental materials should be selected with both appearance and long-term performance in mind. Consider how frequently a surface will need cleaning, whether individual components can be repaired or replaced, how readily materials are available, and what maintenance they may require.
How Can Fargo Rental Owners Decide Which Renovations to Prioritize?
Fargo owners can start by comparing their property with similar rentals in the area and identifying features or conditions that may affect its competitiveness. The next step is to rank potential improvements by condition, expected maintenance needs, marketability, and cost rather than treating every renovation as equally valuable.
Do Rental Renovations Need to Meet Specific Requirements in Fargo and Surrounding Areas?
Potentially, depending on the renovation and the property. Changes involving electrical, plumbing, heating and cooling, structural elements, or other building systems may involve applicable codes, permits, inspections, or professional requirements.
Because requirements can vary by project and jurisdiction, owners should confirm the applicable requirements with the relevant local authorities and qualified professionals before beginning work.