When it’s time to rehab your new investment property or renovate an existing one, not every change or addition is created equal. While it’s possible to give an old property new life with a few updates, sometimes you’ll need a more extensive overhaul to get it ready to rent. Here are 13 renovation and rehab strategies to get you started.
Seven Affordable Renovations for Real Estate Investors
If money is tight, but your property desperately needs a refresh, here are seven strategies for a quick facelift.
- Start with paint: It’s shocking to see how much a simple coat of paint will change the look of a property. Focus on neutral colors, and don’t forget to touch up the trim.
- Replace the front door: The front door is a potential tenant’s first impression of your property. If it’s rotting, peeling, or otherwise damaged, it’s time to update your entrance.
- Add some tile: If your home’s front door opens directly into a living room or a kitchen, a quick way to create an entry without adding a wall is to use tile. Tiling the front entry and adding a hook for coats and keys defines the space and feels more welcoming.
- Swap out switch plates and door handles: Switch plates and door handles are high-touch surfaces in any property. They can show signs of wear and tear that make your investment look tired and dated. Replacing them updates the property and gives it a fresh look.
- Hang a shower curtain: Add a nice shower curtain with a curved rod for both single-family homes and apartment rentals. This is a simple touch that can take a shower from basic to spacious. There’s a reason why high-end hotels use this trick!
- Paint kitchen cabinets and update hardware: Painting the kitchen cabinets and updating kitchen hardware are simple renovations that can add value to your investment property. Designs change, and you don’t want your cabinets to date your investment. Plus, kitchen cabinets take a beating, and little chips and stains make the room look tired. Add a fresh coat of paint and new, modern door handles and drawer pulls to brighten the room on a budget. This is the change to make if you want to save money while making a big impact.
- Focus on the home’s exterior: Renovation and rehab strategies for real estate investors aren’t just for a home’s interior. It does not matter how glorious the inside is if the outside features overgrown bushes, peeling paint, dilapidated shutters, and a mailbox with a door hanging off the hinges.
Stand at the curb and evaluate what changes would make the property shine. Add a fresh coat of paint to the siding and the shutters, invest in landscaping, and hang a new mailbox.
High-Investment Renovation Ideas for Real Estate Investors
Some properties may require more extensive rehabilitation before you sell or rent them to tenants. Here are six more extensive renovation and rehab strategies to consider to get the most out of your investment.
Remodel the Kitchen
Remodeling the kitchen offers one of the best ROIs when it comes to major renovations. This is sometimes as simple as swapping out builder-grade appliances for stainless steel, but it might entail more significant projects, including:
- Moving water lines to accommodate a new layout
- Adding a gas line for a stove
- Building up or tearing down walls and partitions
- Custom-building an island
A total kitchen remodel is not always optional. Some investment properties bought as foreclosures or with the intention to flip must be completely updated to meet code and safety standards.
Depending on the price your real estate agent negotiates, a required kitchen remodel is not necessarily a deal breaker. But it bears consideration before you sign on the dotted line.
Improve the Bathrooms
Once you set a budget for a rehab or major renovation, you can decide if it’s time to tackle renovating one (or all) of your property’s bathrooms. The ROI for a bathroom renovation averages about 70%, but it depends on the extent of the remodel and the quality of the finishes.
At a minimum:
- Replace the tub, sink, and toilet
- Consider adding modern touches, such as a frameless glass shower enclosure
- Add double sinks in a new vanity
- Upgrade shower and bath fixtures
Expand the Outdoor Space
Outdoor living is booming, and many real estate investors are opting to renovate existing outdoor spaces to make them more hospitable. It’s common to add a deck or patio, but also consider:
- An outdoor kitchen
- A wet bar
- A garden area
- A space for outdoor games or a play area
Another option is adding a small garage or even a mother-in-law suite. Check to ensure this type of accessory dwelling unit is permitted before undertaking this major addition.
Choose Different Flooring
Real hardwood floors come with an inner glow and quality that reflects the beauty of the wood from which they are milled. However, real hardwood flooring is typically more expensive, harder to install, and more complicated to refinish than other equally beautiful choices. This is another situation where aesthetics should not outweigh usefulness.
Consider other types of flooring, such as engineered hardwood floors or bamboo, to get a better deal on a beautiful floor. If you plan on renting your investment property to families, vinyl flooring is another option. It’s durable, waterproof, and more affordable than most types of flooring.
Knock Down a Wall
Open-concept living was tested by fire during the COVID-19 pandemic, when families were forced to work and school at home. And even though some people are looking for more private rooms, open-concept living is attractive and still in demand.
Knocking down a wall needn’t be drastic. It might be as simple as opening the galley kitchen to a living or dining area, or combining two small bedrooms to create a spacious master.
Refinish the Basement
If your investment property is lucky enough to have one, a basement is often an untapped resource — more than just a place to store seasonal decorations and childhood mementos.
A total basement renovation should start with waterproofing and heating and cooling, but the sky’s the limit after that. Want to install a wet bar and a large-screen TV for movies? Or would you prefer to keep it more family-oriented, with space for comfy couches and tables for game night? Real estate comps in your area can help you decide what extras will generate the most ROI.
Either way, a finished basement can add value (and, in some states, square footage) to your home.