As we’ve shared, our real estate investment strategy focuses on updating houses and adding basement suites. This increases the value and equity in our homes (which can be leveraged) as well as creates ongoing income. Interested in doing this? To make the most of this strategy, it’s important to make cost-conscious choices with deciding on rental renovations. We shared 4 smart areas to invest in when building rental suites to make a rental more attractive to tenants, keep them happy and decrease workload and worry for the landlord. The last thing you want to do is waste money on things that are not going to increase the value of your rental or ease of your life. However, you will have to make many more decisions during rental renovations.
How can you navigate some of the choices needed when deciding on rental renovations? We narrowed it down to the following questions.
Ask these 3 questions to help ensure cost-conscious spending when deciding on rental renovations:
1. Will this make the rental suite more attractive to renters?
Will whatever you’re considering actually be noticed by prospective tenants and give you an edge in the rental market you’re in? Is it needed to make your rental more desirable? This is an important consideration if it can be hard to find tenants or the vacancy rate in your area is high. If there are a lot of rentals available, renters can afford to be choosy. On the other hand, it may be totally unnecessary to add extras or higher quality finishes if the rental market your in doesn’t support the upgrades.
2. Will this increase the amount of rent we can charge?
Really consider if what you are thinking about adding to your rental is worth it. Can you put a number on how much more rent you will get for it? For example, an additional bedroom translates to additional rent each month. Fancy knobs on the kitchen cabinets does not. Similarly, if you’re making your rental a luxury space in an area that won’t support it or doesn’t attract a renter that will pay top end of the market then you probably want to save the money.
3. Will this make my life as an owner/landlord easier?
There are some things that will make your life as a landlord easier. Many of these things are worth investing in, or at least considering investing in them. This is anything that makes your life easier, simpler or gives you peace of mind.
The benefit of hindsight
If you’ve already renovated your rental space these questions can help you evaluate your decisions. While it’s too late to change them for the current rental, you’ll be learning for your next rental renovation. These questions may also confirm decisions you made. For example, once our 2nd basement suite was added, we were second guessing if we should have made the kitchen a bit larger by taking more space from the our carport entry and storage area. The minimal space the suite would have gained wouldn’t have made the suite more rent-able, have made a difference to the amount of rent we could charge or had an impact on us. In fact, it was a bonus to us to have it as is because it gave us the space. For an account of how easy it is to overspend, check out this post by Gus Ross on Bigger Pockets.
Of course, all of these considerations when deciding on rental renovations have to be weighed against the total budget as well as what is going to give you the biggest bang for your buck. This is a personal choice based on what you value and the climate of the market you are in. Some may need to spend more on finishings to attract renters while others place higher importance on ensuring the house is in tip top shape to minimize problems. These questions will help but you need to decide what is important to you. Just be sure the choices you make when deciding on rental renovations will pay off.
Do you have another question we should add to the list? Let us know in the comments!
Denise and Sean