To have the maximum return on your rental property investment, you need to develop a steady and long-term property renovation budget. While rental properties do not usually need an absolute “flip” renovation, it is important to know where you have to allocate your property renovation budget for the best effect on the Brentwood market in increasing rent value.
Expert property investors recommend allocating funds for property renovation on the key features of the property based on the following percentages:
- Kitchen: 30%
- Bathroom: 20%
- Exterior: 20%
- General Improvements/Other: 30%
After you determine the parts of your property that fall under these percentages, calculate 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 can look like this:
- Kitchen: $12,000
- Bathroom: $8,000
- Exterior: $8,000
- General Improvements/Other: $12,000
Keep in mind, each adjustment needs to consider your target market and what will maximize value for your future Brentwood renters. List each room and feature of your property and utilize your allocated property renovation budget to find what needs the most improvement (you do not have to use the full budget).
Some property investors will want to make the most of their property renovation budget by redoing the entire kitchen or bathroom; however, it is essential to keep costs as low as possible and find what needs the most work. For instance, you could keep 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 keep their walls and layout, but you could place a new shower head or heads, toilet, or vanity if you aim for a more clean and modern look. If there are items from your property that you do not wish to keep, consider using a second-hand market by selling them to have extra funds for adding new items. Alternatively, some Brentwood investors might buy from the second-hand market or a community online classifieds section to find lower cost items for kitchens, bathtubs, windows, and doors to cover costs.
In general, a full renovation with your Brentwood property renovation budget will most likely always add value. However, overcapitalizing can become a factor, particularly when rental values can alter depending on the market. As such, ensure that your budget suits your goals and that you do not make expensive renovations that are not needed to bring in higher rent.
In establishing the most important items to focus on with your property renovation budget, we have found that these items tend to attract an increased rent value:
- Updated kitchen and bathroom to be more modern
- Installing 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 important aspect in renting to Brentwood residents is to have the best presentation that you can to give a positive impression with your prospective residents that will last even after they decide to live in your property. Additionally, prior to contacting you, prospective residents will often drive by the property to observe its condition. If they are impressed, then they will contact you for more information. If not, they will likely move on to the next rental property. As such, curb appeal can help attract and keep quality residents. An effectively planned property renovation budget will result in meticulous consideration of all the costs necessary to allocate the right resources and time to what counts most to your future residents.
Interested in a free assessment of your Brentwood property or would you just like to talk to one of our team members? Contact us online or call us at 925-794-8339 today!
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