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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.
Scott McGillivray is a real estate expert and host of HGTV Canada’s Income Property and Moving the McGillivrays.
Scott McGillivray is a real estate expert and host of HGTV Canada’s Income Property and Moving the McGillivrays.
Real Estate
15 Renovations That Add Value to an Income Property
December 13, 2017
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.
Scott McGillivray is a real estate expert and host of HGTV Canada’s Income Property and Moving the McGillivrays.
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Update the Kitchen
1/15Update the Kitchen
1/15Photo Credit: Skit Inc.
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.Real Estate15 Renovations That Add Value to an Income PropertyUpdate the Kitchen
PHOTO 1 of 15READ LESS -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.Photo Credit: Skit Inc.
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Update the Bathroom
2/15Update the Bathroom
2/15Photo Credit: Skit Inc.
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.Real Estate15 Renovations That Add Value to an Income PropertyUpdate the Bathroom
PHOTO 2 of 15READ LESS -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.Photo Credit: Skit Inc.
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Add a Bedroom
3/15Add a Bedroom
3/15Photo Credit: Skit Inc.
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.Real Estate15 Renovations That Add Value to an Income PropertyAdd a Bedroom
PHOTO 3 of 15READ LESS -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.Photo Credit: Skit Inc.
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Build a Separate Entrance
4/15Build a Separate Entrance
4/15Photo Credit: Skit Inc.
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.Real Estate15 Renovations That Add Value to an Income PropertyBuild a Separate Entrance
PHOTO 4 of 15READ LESS -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.Photo Credit: Skit Inc.
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Top Up Insulation
5/15Top Up Insulation
5/15Photo Credit: McGillivray Entertainment
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.Real Estate15 Renovations That Add Value to an Income PropertyTop Up Insulation
PHOTO 5 of 15READ LESS -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.Photo Credit: McGillivray Entertainment
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Heated Floors
6/15Heated Floors
6/15Photo Credit: McGillivray Entertainment
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.Real Estate15 Renovations That Add Value to an Income PropertyHeated Floors
PHOTO 6 of 15READ LESS -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.Photo Credit: McGillivray Entertainment
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Fresh Paint in Neutral Colours
7/15Fresh Paint in Neutral Colours
7/15Photo Credit: Skit Inc.
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.Real Estate15 Renovations That Add Value to an Income PropertyFresh Paint in Neutral Colours
PHOTO 7 of 15READ LESS -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.Photo Credit: Skit Inc.
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Create a Private Laundry Space
8/15Create a Private Laundry Space
8/15Photo Credit: Skit Inc.
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.Real Estate15 Renovations That Add Value to an Income PropertyCreate a Private Laundry Space
PHOTO 8 of 15READ LESS -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.Photo Credit: Skit Inc.
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Remove Carpeting
9/15Remove Carpeting
9/15Photo Credit: Skit Inc.
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.Real Estate15 Renovations That Add Value to an Income PropertyRemove Carpeting
PHOTO 9 of 15READ LESS -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.Photo Credit: Skit Inc.
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Install a Dishwasher
10/15Install a Dishwasher
10/15Photo Credit: Skit Inc.
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!Real Estate15 Renovations That Add Value to an Income PropertyInstall a Dishwasher
PHOTO 10 of 15READ LESS -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!Photo Credit: Skit Inc.
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Install a Glass Shower Door
11/15Install a Glass Shower Door
11/15Photo Credit: Skit Inc.
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.Real Estate15 Renovations That Add Value to an Income PropertyInstall a Glass Shower Door
PHOTO 11 of 15READ LESS -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.Photo Credit: Skit Inc.
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Update Hardware and Lighting
12/15Update Hardware and Lighting
12/15Photo Credit: Skit Inc.
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.Real Estate15 Renovations That Add Value to an Income PropertyUpdate Hardware and Lighting
PHOTO 12 of 15READ LESS -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.Photo Credit: Skit Inc.
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Add Architectural Mouldings
13/15Add Architectural Mouldings
13/15Photo Credit: Skit Inc.
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.Real Estate15 Renovations That Add Value to an Income PropertyAdd Architectural Mouldings
PHOTO 13 of 15READ LESS -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.Photo Credit: Skit Inc.
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Improve Curb Appeal
14/15Improve Curb Appeal
14/15Photo Credit: Skit Inc.
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.Real Estate15 Renovations That Add Value to an Income PropertyImprove Curb Appeal
PHOTO 14 of 15READ LESS -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.Photo Credit: Skit Inc.
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Wash the Windows
15/15Wash the Windows
15/15Photo Credit: Skit Inc.
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.Real Estate15 Renovations That Add Value to an Income PropertyWash the Windows
PHOTO 15 of 15READ LESS -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.Photo Credit: Skit Inc.
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