3 Rental Property Upgrades that Don’t Pay Off
As a rental property owner, you know it’s your job to make your unit stand out amongst the competition so that renters want to sign a lease. There are several ways you can do this, and one of the most popular is to add an amenity or upgrade that other rentals in the area lack. This makes your unit more appealing and thus more likely to be rented.
However, I’ve seen too many investors take this idea and run with it, only to wind up hurting themselves. How? Because they invest time and money into an upgrade that just doesn’t pay off. This can happen because they misjudge the level of appeal they think it will generate, or the upgrade simply doesn’t translate into the rent increase they thought it would.
Here are 3 of the most common upgrades I see that almost never pay off when you add them to a rental property.
Everyone needs a refrigerator and stove that works. I’m not arguing that. But do your tenants really need a side-by-side fridge with digital temperature readout, or a 6-burner Viking stove? Nope, they don’t. And you’ll be wasting your money if you install appliances like these in your rental property. When it comes to appliances, choosing a reputable brand at a mid-range price is generally the way to go. These items are used heavily, so you want ones that are durable and dependable – not the cheapest, bottom-of-the-barrel ones you can find. It’s tempting to pick something less expensive, but remember that appliances are especially prone to wear and tear, and you usually need to call a pro for any repairs. So don’t go cheap, but definitely don’t go expensive, either.
Fancy Kitchen/Bath Updates
Kitchens and bathrooms sell homes. Bu that doesn’t necessarily mean they rent them. Like high-end appliances, fancy updates such as quartz countertops or a farmhouse sink in your kitchen and bathroom usually aren’t worth it for a rental property. Sure, they look great, and prospective tenants are probably going to ooh and ahh over them, but is the extra amount you can charge in rent going to cover the cost of the project? Not likely. Before updating any feature of your rental property, take the time to research which ones tenants are actually interested in, and avoid design-specific ones that won’t appeal to a wide swath of your tenant pool and may very well be outdated by the time it’s paid for.
High Maintenance Landscaping
Curb appeal is a major selling point for your property, so having a nice looking yard is important. But when it comes to landscaping, a little bit goes a long way. Planting a big variety of trees, bushes, flowers and shrubs may look great, but the maintenance required to take care of these things is too much for most people to handle – tenants and landlords alike. No matter who’s in charge of taking care of the yard, you should plant low maintenance, hardy items that don’t need frequent pruning or cleanup.
I’ve seen investors use a variety of approaches when it comes to their properties. Some go the cheap route, choosing the most inexpensive items they can or even neglecting certain features that most people consider standard. On the other end of the spectrum are the investors who pour way too much into their property, falsely believing that their expensive upgrades will translate into increased profits. My advice is this: shoot for the middle. Find decent quality items that are affordable and in your budget, and research carefully anything that’s going to require a substantial investment to ensure that it really will pay off.