Could you benefit from a change of scenery? You’re not alone – and that could equate to a big financial opportunity. After many months of staying home, it feels like everyone is ready to start dreaming of the bright getaways on the horizon. If you own a US vacation property or are thinking of making a rental property investment across the border, now could be the perfect time to do a home renovation to create a must-rent listing for years to come. But what home improvements add the most value to a vacation property?
Instead of splurging on the upgrades that suit your personal taste as you would for the house you live in, focus your renovation budget on features that will make your property stand out as the perfect vacation spot – so that you can charge higher rates, give your renters a better experience and bring in more rental income from your investment. From new kitchen ideas that renters will love to spa-worthy bathroom updates, these home renovation ideas are the best home improvements to increase the value of your rental property.
1. Find Some Indoor-Outdoor Flow
What makes a property value increase? When it comes to vacation rentals, the key is to invest in renovations that enhance your property’s functionality, flow or convenience – or, preferably, all three. If your property has an outdoor space – whether it’s a small balcony or a big backyard – ensure that it’s easy to access by installing a sliding glass door or French doors. By creating a more-effortless indoor-outdoor flow, your guests will feel like they have more space to spread out and relax.
2. Cook Up a Renter-Friendly Kitchen With Open Shelves
The kitchen is the showpiece of any home, so it’s smart to focus your renovation budget to making your property’s cooking space stylish – and it’s also an opportunity to cater to the needs of your renters. While you may love a block of upper cabinets in your own kitchen, installing renter-friendly shelves makes it easier for guests to find dishes and essential items, and to keep the kitchen tidy
3. Add a Second Bathroom
Does your US property have plenty of bedrooms, but just one small bathroom to share? This isn’t uncommon, but it can be limiting your enjoyment of your vacation property – and diminishing its value potential by keeping higher-rate renters away. Adding a second bathroom – whether that means turning a closet into a powder room or adding a large bathroom to create an impressive master suite – can be one of the best home upgrades, especially in a vacation property.
Start by doing your research and creating a realistic renovation budget for the project – if a larger renovation like adding a bathroom will add substantial value to your rental property, it may be worth contacting RBC to discuss options for leveraging the equity in your property through a home equity line of credit* or refinancing to help complete the project.
4. Try a Fresh Coat
What’s the easiest way to update a house on a budget? Grab a brush and a roller. A fresh coat of paint (both indoors and outdoors) is one of the best ROI home improvements you can take on for your vacation home. Fresh paint can make your property look like new in photographs (making it more desirable from the get-go) and it’s a quick, low-cost project that you can DIY. Just be sure to keep the colour palette neutral so it will appeal to all kinds of renters.
5. Create a (Vacation) Home Office
The way that we work has changed dramatically this year, with many careers now allowing for more remote work – which means that more and more people may want to work from a vacation home. With this in mind, a simple home renovation to transform an awkward nook or unused den into a useful home office can add a lot of value to your rental. Something as simple as creating a designated work space with a desk, comfortable chair and a strong WIFI connection could make your property more attractive to a vacationer that wants to work while they’re away.
6. Let the Light In
To get the most from your US vacation property, consider updates that play up its best features – like its location and views. New windows (whether that means replacing old, drafty windows or renovating to add new or wider windows in a dark space) can totally transform the look and feel of a vacation home. Long term, new windows offer added benefits like lower energy costs and noise reduction. If it’s the right time to let in some light, consider contacting RBC to learn about your options to access the equity in your vacation home through a home equity line of credit* or refinancing to help with renovation costs.
7. Keep Feet Warm
Renovating the bathroom is almost always a good investment in a modern house remodel, and it’s an especially good idea in a rental property. While you may want to start with the obvious like a new vanity and fixtures, consider adding a little luxury like heated floors for a spa feel. Think about it: when you’re on vacation, you want to relax – so a spa-like bathroom experience will draw you in. This is an especially valuable renovation if your rental property is located in a cold climate.
8. Go Energy Efficient
Do appliances add value to a home? While it’s not likely that someone will rent your vacation property specifically for the appliances, sleek, new appliances in the kitchen will certainly update the look of your space – and energy efficient appliances will reduce your energy costs, saving money (and the environment) in the long run.
9. Capture Better Curb Appeal
When it comes to your rental property investment, what’s on the outside counts too. Small upgrades to your property’s exterior like a new (or painted) front door or exterior paint can make a big difference for curb appeal, which can help attract renters to book your property.
10. Update (or Add) Your Laundry Space
It may not be glamorous, but laundry is a fact of life. If your property lacks laundry facilities, creating a laundry space with a washer and dryer could be a high-value home renovation that makes your property more convenient and practical for renters (and you!). If you have a laundry room but the appliances are old and not in great condition, replacing them with newer energy-efficient models could instantly update the look and functionality of the space, too.
Check out the video below to find out which three upgrades Sarah Baeumler has at the top of her list when it comes to adding value to a vacation property:
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*Home Equity Lines of Credit (HELOCs) are subject to approval, including verification of acceptable income, credit worthiness and property valuations. Minimum and maximum property values and maximum loan-to-value ratios apply. Homeowner’s insurance is required for all loans and lines of credit and flood insurance is required if the property is located in a Special Flood Hazard area. In addition to a ½% Origination fee (with a $500 minimum and a $2,000 maximum) due at origination and a $50 annual fee, third party closing costs for Home Equity Lines of Credit may range from $900 to $9,000. Home Equity Lines of credit are not offered for properties in Texas. Home Equity Lines of Credit are not available for investment properties. An investment property is a property that is not occupied by the owner/borrower for at least two weeks per year.
Refinancing not offered for properties in Texas.
First and third images courtesy of Getty Images, other images courtesy of Unsplash