Return on investment or ROI is on the mind of every residential property owner and investor. Take a look at the two lists below. When you compare Group A with Group B, which set do you think would give you the biggest return in a residential rental property?
- Deep Cleaning of the Home
- Neutral Colored Paint
- Recently Updated Pre-Fab Countertops
- New Cabinet Hardware
- Updated Light Fixtures
- White Appliances
- Ceiling Fans
- Basic Cleaning (including Carpets)
- Accent Color Walls in Each Room
- New Granite Countertops
- New Cabinets
- New Window Treatments
- Stainless Steel Appliances
- Built-in Microwave
The answer here lies with the items in Group A. Group A enhancements will help get your rental home leased faster to a quality tenant, without breaking the bank. A thoroughly cleaned home shows better to prospective tenants than a broom swept one, and actually encourages good housekeeping. With paint, white ceilings and neutral colors can open the room, while “trendy colors” may make the room feel smaller (and may not be the style next year). Like paint, a low cost, easy to install countertop can change the whole look and feel of the room, rather than spending thousands on granite which appeals differently to different people. Good lighting, ceiling fans, and solid appliances add to the comfort of living in the home.
Another enhancement to consider is hardwood or laminate flooring instead of carpet for durability and a nicer appearance. And don’t forget the “curb appeal” of your home. Most renters drive by the home first, so make sure your home gives a good first impression. Making these types of investments will keep your properties in great working condition and appeal to new renters while also keeping current renters satisfied.
We’d love to hear from you. What home improvements items have worked well for your investment property?