To have the greatest return on your rental property investment, you must develop a steady and long-term property renovation budget. Although properties being rented out do not usually need a complete “flip” renovation, knowing where you need to allocate your property renovation budget is important to get the greatest effect on the Waldorf market in elevating rent value.
Seasoned property investors recommend allocating funds for property renovation on the main property features based on the following percentages:
- Kitchen: 30%
- Bathroom: 20%
- Exterior: 20%
- General Improvements/Other: 30%
After you establish the parts of your property that belong to these percentages, factor in the total worth of the property and take 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 should look like this:
- Kitchen: $12,000
- Bathroom: $8,000
- Exterior: $8,000
- General Improvements/Other: $12,000
Do remember that each adjustment needs to factor in your target market and what can maximize value for your future Waldorf renters. List each room and feature of your property and utilize your allocated property renovation budget to figure out what needs the most improvement (you do not have to use the whole budget).
Other property investors will want to maximize their property renovation budget by redoing the complete kitchen or bathroom, but it is important to keep costs as low as possible and find what needs the most work. For example, you could maintain the main kitchen body and only replace the floors, sink and faucet, add new appliances, and paint the cabinet doors or add new handles. Bathrooms can generally stay the same with their walls and layout, but you can put in a new shower head or heads, toilet, or vanity based on your aim for a more clean and modern look. If there are things from your property that you don’t want to keep, consider utilizing a second-hand market by selling them to have more funds for adding new items. Alternatively, to cover costs, some Waldorf investors might buy from the second-hand market or a community online classifieds section to get lower cost items for kitchens, bathtubs, windows, and doors.
In general, a complete renovation of your Waldorf property renovation budget will most likely always add more value. However, overcapitalizing can become a factor, especially when rental values can alter according to the market. As such, ensure that your budget fits your goals and that you do not perform expensive renovations that are not required to attract higher rent.
In determining the most important items to concentrate on with your property renovation budget, we have found that these things tend to attract a higher rent 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 essential factor in renting to Waldorf residents is to have the best presentation that you can to make a good impression with your potential residents that will last even after they decide to live in your property. Additionally, prior to communicating with you, potential residents will often drive by the property itself to view its condition. If they are impressed, then they will contact you for more information. If not, they may move on to the next rental property. As such, curb appeal could help attract and retain quality renters. An effectively planned property renovation budget would result in careful consideration of all the costs necessary to allocate the right resources and time to what matters most to your future residents.