Renovations aren’t just about increasing the resale value of your home – with the right renovations you can bring in even more rental income on your rental property. If you’re currently between tenants, now could be the perfect time to undertake some key renovations that deliver the best ROI to boost your rent.
You don’t have to spend $30,000 on a new kitchen or bathroom to increase your rent – tenants often view many properties before making a decision, so yours just has to have key selling features stand out from the rest. Although the return on specific renovations and improvements can depend on your neighbourhood, here are five renovations – to paraphrase Scott McGillivray – to start taking bigger cheques to the bank.
Homeowners aren’t the only ones who rave about hardwood floors. You only get one chances to wow prospective tenants, so what better way than when they first step foot in your house? There’s no better way to scare away applicants than old worn out floors. In most cases, quality rental suites are more likely to attract quality tenants who take good care of your place and pay their rent on time.
If new hardwood floors aren’t in your budget, refinishing your floors can be the next best thing. Greeting tenants with pristine hardwood floors throughout the rental unit is a good way to make your rental unit stand out.
If you’re a homeowner with the luxury of a dishwasher, you’ve probably forgotten a world exists where people actually wash their own dishes by hand. While some tenants could care less if your property has a dishwasher, for others it can be a breaking point.
Depending on the property, tenants may expect a dishwasher. For example if you’re renting the main floor of a bungalow most tenants will expect a dishwasher in the kitchen, but if you’re renting the basement of your house, a compact dishwasher can be a nice surprise to help seal the deal.
Laundry can be a major selling point – or a deterrent – in your rental property. At one end of the laundry spectrum you’re on your own (you’ll need to head to the Laundromat to wash your own clothes), in the middle is shared laundry (found in most two unit family homes), and at the opposite end you’ll find the holy grail of cloth washing – separate laundry.
Giving tenants their own stackable front-loading washing and drying machine is a great selling feature to command a higher rent. Laundry comes down to tenant expectations – if you’re renting a condo, your tenant will expect separate laundry, but if you’re renting the basement in your house, it can seem like a real luxury.
When I moved into my house a year and a half ago, I started renting out my house immediately. When it came to renovations, I didn’t have to think twice about installing air conditioning.
Just like you, your tenants want to be comfortable at home – they don’t want to feel overheated on those humid summer nights. Again, the expectations of tenants depend on your neighbourhood – you might actually have to offer a discount on your rent if you don’t have central air.
Adding a Bedroom
If your rental unit is poorly laid out, adding an extra bedroom is a great way to increase rent by at least $50 to $100 a month. When your house was built, chances are whoever built it didn’t expect you to turn your basement into a rental suite. If your furnace or laundry room is over sized, using the extra space to add a second bedroom can offer a great ROI. Just make sure you’re adding a legal bedroom – it’s probably not wise to add a second bedroom if it only has a small window and feels like a dungeon.
These are just some of the basic renovations and improvements that you put more rent in your pocket. As mentioned, if you live in a posh neighbourhood, you might actually have to offer a discount on your rent if your apartment is lacking these features.
Landlords, which renovations have you used to increase the rent or your properties?
About the Author: Sean Cooper is a single, 20-something year old, first time home buyer located in Toronto. He has experience in the financial sector as a Pension Analyst, RESP administrator and Income Tax Preparer. He holds a Bachelor of Commerce in business management from Ryerson University. You can read some of his other articles here.If you would like to read more articles like this, you can sign up for my free weekly money tips newsletter below (we will never spam you).