Landlords and “fix and flip” investors frequently upgrade their investment properties to increase their profitability before acquiring tenants or selling the units. Renovations related to plumbing, electric, roofing, or other major systems often require updating for safety reasons.
Investment properties in working order might not require improvements, but they will benefit from aesthetic modernizations. Well-managed, attractive spaces reap better offers and more rental applicants. However, large overhauls don’t always fit within budget.
Luckily, some small upgrades still yield monetary rewards for investors, and you should implement them whenever possible. Consider the following five visual upgrades whether renting or flipping investment properties.
1. Better Lighting
Nobody wants to live in a room void of windows or natural light. And homes with ample windows can still appear gloomy without the proper artificial lighting. Rather than deter renters and buyers, install recessed LED bulbs in the ceiling to brighten spaces without impeding open airspace.
Also add task lights in kitchens before showings and open houses. Under-cabinet illumination brightens countertops and excites potential residents passionate about cooking.
Pendant lights are practical and stylish options to consider. Avoid anything overly modern or ornate, as extreme designs might deter potential tenants and shoppers. Rather, opt for clean, classic styles to interest a wide range of buyers or renters.
Bright spaces impress in person and on paper. They tend to photograph better, and high-quality listing photos generate increased interest. Superior advertising leads to higher profits for investors on their homes for rent or for sale.
2. New Floors
Carpets usually need replacing about every two years in rental units, especially in pet-friendly complexes. Carpeted single-family homes are acceptable, but not ideal. Wood, on the other hand, tends to generate mass appeal. Hardwood floors look clean and contemporary, and tend to maximize the look and feel of open floor space. However, genuine hardwoods are costly, running investors between $8 to $12 per square foot, or about $1,400 for 12-by-12 foot rooms.
It’s important to avoid overspending when the ultimate goal is profit. Linoleum floors mimic hardwood without the high price tags, costing anywhere from $7 to $11 per square foot. The complete installation can run as low as $1,000 for 12-by-12 foot rooms.
Most residents appreciate classic-looking floors over dated, stained carpeting, regardless of authenticity.
3. Updated Appliances
Many interior designers consider white and black appliances out-of-date, making stainless steel the most popular finish. If you are doing a high-end rehab, splurge on stainless steel refrigerators, microwaves, dishwashers and ovens. Stainless steel has a long life span and won’t discolor as rapidly as colored alternatives. Stainless steel refrigerators can range anywhere from $600 to $10,000 on the high end, whereas white/black refrigerators cost around $400 to $3,400.
If stainless steel is outside of budget, stick to monochromatic appliances – all black or all white only. Otherwise, culinary spaces appear chaotic.
Add character to even the blandest rooms with crown molding. Contemporary spaces benefit from thin molding to create seamless home designs. Sand and stain wood molding to add rustic appeal to interiors. Alternatively, thick, white moldings complement more traditional homes. Homeowners might also consider adding molding around windows to make them stand out. Materials for 200 feet of molding costs anywhere from $400-$600, excluding labor costs and mounting materials.
Investors can purchase faux, lightweight pieces to inexpensively and easily install detail along ceilings, floors and window frames. Synthetic molding, made from polystyrene or polyurethane high-density foam, is lightweight and easy to install. Although economical at around $1 per square foot, faux molding is delicate. Use caution during installation.
5. Fresh Paint
Arguably the easiest solution for dated interiors is repainting. Nicks and scratches on walls seem minor, but act as red flags to potential residents looking for well-maintained properties. Fresh paint helps mask previous nail holes, pet scratches, moving scuffs and other blemishes related to wear and tear.
Obviously, water damages leading to cosmetic flaws should be fully repaired before repainting. Quality paint typically costs about $15 per gallon on the low end, but use a paint calculator to determine the exact number of gallons required for various spaces. Factor in primer costs and labor fees, unless considering a budget-friendly, do-it-yourself approach.
Consider painting other areas of the home besides the walls, including kitchen and bathroom cabinets, trim, and even old floors in need of refinishing. Curb appeal helps at resale, and freshly-painted exteriors draw potential buyers or renters in to explore further.
Rather than overspending on large or unnecessary improvements, attempt small alterations to your investment properties to reap monetary rewards through increased rental rates or higher list prices.
Jennifer Riner lives in Seattle and writes about real estate investing, rental management, and home improvement for Zillow. Zillow is the leading real estate marketplace on the Web where users can easily find vital information about homes, and connect with reputable, local professionals who meet their needs. Zillow provides products and services to help users through every stage of home ownership – buying, selling, renting, borrowing, and remodeling. This article is reprinted here with permission from Creative Real Estate Online at http://www.creonline.com