With any kind of value adding renovation you have to weigh the cost against how much you’ll get back in return. Sometimes ROI is measured in the equity you build, and sometimes it’s measured in quality of life. In the case of income properties it’s measured in a few ways: the equity you’ll build in the house, the type of tenants you’ll attract, and the cash flow you’ll get from the rental. If you can maximize all three, you’ll have a great recipe for success. Read on for my top 15 ways to add value to your income property.
Update the Kitchen
The number one room in the house when it comes to remodelling return on investment is the kitchen. And it’s as true with rental properties as it is with any other. An updated kitchen with stainless steel appliances and neutral cabinets will help increase the value of your property and allow you to charge higher rent.
Update the Bathroom
After the kitchen comes the bathroom. No one wants to walk into a dirty or dated bathroom. With the move towards more spa-like bathrooms, something clean, modern and updated will definitely appeal to potential renters and convince them to pay just a little bit more.
Add a Bedroom
In some cases this won’t be possible, but if you can make it work, three is the ideal number of bedrooms most homes should have. In the case of an income property it also gives you the opportunity to rent to a family, or to rent by the room.
Build a Separate Entrance
A separate entrance is like the holy grail of the investment property checklist. However depending on the house sometimes you can add one without too much difficulty. A separate entrance at the side or back of the house makes the unit feel more private. Just make sure you’re not making a bigger investment than you’ll get back in cash flow over time.
Top Up Insulation
The biggest complaint I hear from owners and renters of income suites is that they hear too much from the neighbouring apartment. Topping up your insulation is a great way to reduce noise transfer, plus it makes your home more energy efficient.
If you’re already putting down new floors in a bathroom or other cold part of the house, I would suggest including an electric floor warming system. Heated floors are becoming increasingly popular and they still have that aura of luxury that can really impress potential renters.
Fresh Paint in Neutral Colours
Colour can be very polarizing. What one person loves, another hates. That’s why it’s always a good idea to paint the walls a neutral colour. Bold and bright colors are bound to turn some people off, meaning they can actually lower the value. But with light neutrals you’ll appeal to a greater number of people and therefore add value to the home.
Create a Private Laundry Space
One of the greatest things you can do to add value to an income property and charge more rent is to include laundry. Shared laundry will do in a pinch, but ideally each unit should have its own private washer and dryer. Squeeze it into a closet, under a cabinet, or next to a fridge. The idea is to tie into the existing plumbing so you don’t have too much additional cost.
Carpet in a rental is never a good idea. It gets stained, it gets damaged and it essentially becomes a Petrie dish. Unless you want to be replacing the flooring on a regular basis, you’re better off installing hardwood, laminate or vinyl. Hardwood is particularly popular and can really add value when installed above grade. If you’re worried about comfort or warmth, use area rugs.
Install a Dishwasher
A very simple way to add value to an income property is to include a dishwasher. While it can be tough in small kitchens, it’s often worth sacrificing a little bit of cabinet space. If there’s one thing I’ve learned over my years renting out properties it’s that people really hate doing the dishes!
Install a Glass Shower Door
Any time I can make it work I include a frameless glass shower door in the bathroom. An overall bathroom update is great, but this little extra can make a huge difference when it comes to making a bathroom look bigger and making it feel more luxurious.
Update Hardware and Lighting
It’s such a small thing but it can make such a big difference. Switching out bland or builder grade hardware and light fixtures for something more stylish can update a room and make it feel more current. When these items appear dated or dingy it makes the entire room feel that way.
Add Architectural Mouldings
One of my favourite tricks for making a room appear more luxurious is to add architectural mouldings. For less than a hundred dollars and only a few hours of your time you can add simple picture boxes. It instantly elevates the room and makes it look high end. It’s little things like this that tend to impress renters and make them feel like they’re getting something special.
Improve Curb Appeal
You might think that curb appeal doesn’t matter as much in a rental, but it does. Just like when you’re selling a house, you want people to be impressed as soon as they approach. Clean up the yard, hide the garbage bins and consider updating the house numbers and mailbox. It doesn’t have to be fancy, it just has to look clean and well-maintained.
Wash the Windows
The easiest way to increase the value will cost you nothing – and it’s something most people forget to do. Washing the windows allows more light to come through, and natural light is a huge selling feature. Windows that are dusty or grimy look terrible and cause the room to look dark. It might sound like nothing, but trust me, it’s a big deal.