Renovating an investment property can be a great way to increase the home value and make more money. The trick is to make sure you improve the areas of the home that will yield the highest return on your investment. While every property is different, there are a few common home improvements you can prioritize to ensure your investment home earns you as much as possible.
At Lamont Bros., our team has seen our fair share of home renovations for investment properties. We’ve worked with several clients to find durable, budget-conscious solutions to serve the specific needs of each home. If you’re looking for ways to make meaningful, value-based home improvements to your investment property, you’ve come to the right place.
In this article, we’ll discuss everything you need to know about renovating an investment property. We’ll discuss the important factors that affect an investment property’s value, and how different types of home improvement projects can benefit different types of investment properties. After reading, you’ll have a better idea of which types of home improvements can make your investment property work best for you. The topics we’ll cover regarding investment properties include:
Understanding Your Investment Home’s Needs
Before diving into any renovation project, it’s important to first identify your end goal for the property. Are you looking to flip it for a quick profit, or do you want to rent it out for a steady stream of income?
Your investment plan for your property will directly influence the improvement you should prioritize. For instance, flips often benefit from a focus on aesthetic appeal and market trends to attract immediate buyers. On the other hand, rental properties benefit from durable and functional upgrades that ensure long-term maintenance ease and tenant satisfaction.
Defining Your Goals with the Property
For Rental Ventures: When making improvements on a property for long-term tenants, prioritize durability and functionality. You want features and materials that stand up to wear and tear while appealing to the broadest tenant base possible.
If you’re planning a short-term rental, your focus should be on achieving a memorable stay. High-end finishes and unique experiences go a long way for repeat renters.
For Flipping: If flipping is your game, your focus shifts to maximizing curb appeal and interior wow factors within a budget. Strategic improvements that enhance aesthetic appeal and functional use of space can significantly increase property value. Think current kitchen design trends, stylish bathrooms, and inviting outdoor spaces.
Prioritizing Projects for Long-Term Rental Properties
Investing in a property with the goal of renting it out requires a different approach than preparing a home for sale. The uniqueness of a long-term rental lies in its need for durability and minimal maintenance, catering to a revolving door of tenants who may not treat the property with the same care as a homeowner.
The Unique Needs of Long-Term Rentals
A long-term rental must withstand wear and tear while remaining appealing and functional for a wide range of tenants over time. This dual need for durability and attractiveness dictates a strategic approach to renovations. It’s about choosing improvements that keep maintenance costs low and tenant satisfaction high, ensuring a steady return on your investment.
Tailoring Improvements to Long-Term Rentals
Low-Maintenance Flooring: Instead of carpet, which deteriorates quickly and requires frequent cleaning, consider vinyl plank flooring or waterproof laminate. These materials are exceptionally durable and offer a wood look without the upkeep.
Paint for Longevity: To ensure longevity while also attracting a large pool of potential tenants, use high-grade, washable paint in neutral tones. This type of paint can withstand cleaning and minor wear, reducing (but not eliminating) the need for frequent touch-ups between tenants.
Kitchen and Bathroom Durability: Opt for materials that can take a beating in these high-use areas. Quartz countertops, for instance, are more durable and require less maintenance than granite. For cabinetry, consider solid wood options that can be easily cleaned and are less likely to damage from water or impact.
Maximizing Value in Flip Properties
When flipping a property, the goal shifts towards creating a visually compelling home that potential buyers can imagine themselves living in. Unlike long-term rentals where the focus is on durability and functionality for tenant use, flips demand a balance of aesthetic appeal, market trends, and cost-effective renovations that significantly boost the property’s value and give you a high profit margin.
The Unique Challenges of Flipping
The flip property market is driven by first impressions and emotional connections buyers form when they first see the property. This requires a keen focus on design, modern amenities, and finishes that appeal to the widest audience within the property’s market segment.
The challenge lies in making cost-effective improvements that dramatically increase the home’s appeal without overspending on renovations that won’t offer a significant return on investment.
Strategic Renovations for Flipping
High-Impact Kitchen and Bath Updates: The kitchen and bathrooms are often the main selling points of a home. Investing in modern, appealing designs in these areas can have a substantial impact on the home’s overall appeal. Consider replacing outdated cabinetry, appliances, and countertops with more contemporary options that reflect current trends. Be careful to keep the budget in check by choosing entry-level materials that offer a high-end look.
Aesthetic Overhauls for Maximum Appeal: Painting the interior and exterior with contemporary, neutral colors can transform the property’s appearance at a relatively low cost. Additionally, updating lighting fixtures and hardware (like doorknobs and cabinet pulls) can add modern touches that enhance the property’s aesthetic appeal without a hefty price tag.
Creating an Inviting Exterior: Curb appeal is crucial in a house flip. Simple landscaping, a well-maintained front yard, and an inviting entryway can make a powerful first impression. Consider also a deck or patio refresh if the budget allows, as outdoor living spaces are highly desirable and can increase the perceived value of the home.
Enhancing Vacation Rentals for Peak Marketability
Owning a vacation home offers a unique opportunity to tap into the lucrative market of short-term rentals. Unlike long-term rentals and flips, vacation properties thrive on creating memorable experiences for guests, encouraging repeat visits and glowing reviews. The key to success in this niche is offering standout amenities and designs that capture the imagination, ensuring your property is the top choice for vacationers.
Unique Considerations for Vacation Rentals
The most successful vacation rentals are those that provide comfort, convenience, and a unique experience that can’t be found in a standard hotel room or home. This means incorporating elements that enhance the guest’s stay, whether through luxurious touches, local flavor, or entertainment options that make the property itself a destination. Ultimately, the goal of making home improvements for a short-term rental investment property should be to create a positive, memorable experience for your guests.
Tailored Improvements for Vacation Rentals
Smart Home Features for Convenience and Security: Integrating smart home technology such as keyless entry systems, smart thermostats, and connected entertainment systems can significantly elevate the guest experience. These features provide convenience and comfort for guests and also offer remote management capabilities for owners, streamlining operations like check-ins and energy usage.
Upgraded Amenities for Guest Comfort: Investing in luxury features and finishes, especially in the kitchen and bathroom, can significantly enhance guest satisfaction. Large walk-in showers and high-end appliances will leave a lasting impression on guests who aren’t used to such high standards of living.
Outdoor Enhancements for Entertainment: An appealing outdoor space is a huge plus for vacation rentals. This can range from a simple, well-designed patio with comfortable seating and a fire pit to more elaborate features like a pool, outdoor kitchen, or a beautifully landscaped garden. These spaces offer guests additional space on the property to relax and enjoy their surroundings during their stay, making your home more desirable.
Want to Learn More About Your Home Improvement Options?
After reading about the different types of investment properties, do you have a better idea of which home improvement projects to prioritize to maximize your return? As you develop a plan for upcoming renovations, learn about how to finance a renovation with our free Remodel Funding Guide. In it, you can learn about the different options for financing a remodel and find insights and advice from industry experts.
Ready to start working on home improvements for your investment home? If so, don’t go it alone. Click the button below to schedule a free consultation with a member of our design team. We’ll help you learn about what to expect from the remodeling process and prepare for the journey ahead.