You’ve decided to make passive income by renting out your space. Fantastic, what next?
Making a considerable return on investment isn’t as easy as posting your space on online home-sharing sites. In fact, even if your home is in good form, there are a number of upgrades that can make it stand out in a saturated rental market. And while there are certain parts of the home that are important, such as the kitchen, there are a few that deserve a splurge.
In this blog post, we will discuss the top 5 things worth splurging on for rental properties — investing in the following list may seem expensive initially, but will yield appreciable returns a few years down the line.
1) Curb Appeal (The Facade)
As a landlord, you want to attract high-quality tenants to your property. One of the most effective ways of doing so is by sprucing up the facade of your home and giving it curb appeal.
Whether you’re listing your property as a short or long term accommodation, it’s likely that potential renters will form an opinion based on the exterior of your home. And first impressions matter!
If the lawn is overgrown and the paint faded, the property will seem as if it is not maintained well — and may deter potential buyers from even entering the space. In contrast, a property with a well-maintained exterior creates a captivating first impression.
So, consider repairing broken fencing, updating exterior lighting, and power washing the porch, sideways, and walkways. You may also hire someone to pave the driveway and paint the exterior if needed. Don’t forget to spruce up the lawn and consider these other ways to improve curb appeal.
2) Updating Outdated, Functional Elements
Considering the interior of the property, it’s essential to upgrade outdated elements that are essential to the functionality of the home, even if it requires a considerable investment. Prioritise optimal plumbing, electrical, ventilation, air conditioning, and heating systems.
Next, shift your focus to parts of your home that require improvement. Repair rusty door hinges, doors in poor condition, and leaky faucets. Upgrade worn-out lighting fixtures and improve the condition of the flooring. If you’re not up for a full floor upgrade, lay down rugs to conceal any damages. You may also consider upgrading your kitchen cabinets to make the kitchen more attractive.
3) The Right Paint Colour and Quality
Boost the aesthetic appeal of your property by giving it a new coat of paint. Fresh wall colours instantly make the space more attractive and make the ambience neater.
Be strategic while choosing paint colours — you want to go with hues that photograph well. For example, warm tones such as beige look more appealing than stark white. You’d also want to invest in high-quality paint that stands regular wear; you don’t want to find yourself repainting every few months after short-term rentals leave.
If you’re struggling to choose the right hues, here’s how to pick paint colours like a pro.
4) Essential Appliances
Prepare your rental property with high-quality appliances — but find the right balance between luxury and practicality. Investing just enough can attract potential buyers and will save you from the headache of frequent replacement and repairs.
This especially applies to kitchen appliances: ovens, stoves, refrigerators, and dishwashers. For example, investing in a practical stainless steel stove is a better option than going for a high-end six-burner piece.
Moreover, investing in energy-efficient appliances helps save energy and lower utility bills. An example is opting for a gas range in place of its electric counterpart — in fact, gas stoves are three times more energy efficient than electric stoves!
5) A Property Manager
Being a round-the-clock landlord can get exhausting, especially with multiple properties, so splurging on a property manager is an optimal solution. They will take much of the work off your shoulders, including:
Taking care of repairs
Communicating with tenants
And much more! (depending on who you hire)
Hiring a property manager generally costs around 10%-15% of the monthly rent collected, which in many cases is worth the reduction in stress and headaches that come with being a hands-on landlord.
When it comes to rental properties, there’s a thin line between choosing what to splurge on and where to save. While expensive flooring and major kitchen and bathroom renovations are not worth spending too much on, a few elements, as listed above, deserve a generous investment and can increase your return on investment over the long term.
If you’re still struggling to prioritise where to spend and where to save on your rental property, book one of our highly experienced Home Design Gurus for personalised advice!