Do renovation or improvement projects seem overwhelming to you? Confused about which improvement projects will help to boost your overall return on investment? While Northern Virginia boasts a stable rental market, tenants are savvy! Well-qualified tenants have fairly high expectations when it comes to where they want to put their rental dollars. As a landlord, if you want to remain competitive in the rental market, your property has to be up-to-date and well-maintained, which means you have to add value to the property if you expect a good return on your investment.
Understanding the difference between boosting ROI & Adding Value
The percentage of revenue generated on an investment is defined as ROI. Profits are typically measured by the value of the property.
ROI: Return on investment (ROI) is a metric used to understand the profitability of an investment. ROI compares how much you paid for an investment to how much you earned to evaluate its efficiency.
Adding value, on the other hand, simply means increasing the house value potential through upgrades and renovations.
Value Add Real Estate: Value add real estate is property that requires some improvements in order to increase its value.
Join us below as we look at the top 5 useful upgrades that can increase your property resale value or boost your ROI.
1. A new roof provides functionality and curb appeal
A savvy rent can spot a bad roof with just a glance--and nothing spoils the day of your tenants faster than a leaky or worn roof. When it comes to investing in a new roof, it is true that a new roof may not get the same attention as a kitchen remodel, but it is just as important, particularly because it is often one of the first things prospective renters look at.
Certainly, structural improvements can be a financially overwhelming for any landlord and for this reason, regular inspections and maintenance are paramount.
2. Boost exterior and cosmetic repairs
In addition to necessary structural maintenance and repairs, improving the exterior of your property can yield big returns. Oftentimes small improvements can be big winners in the eyes of tenants.
Consider the following renovations to make a lasting impression for renters/ buyers.
Feature convenient on trend exterior lighting
Install new exterior fixtures
Paint or replace the front door
Consider upgrading the garage door
Power washing the exterior
Improve the landscaping with brightly colored and appropriate native flowers, shrubs, or trees.
Install a patio or custom walkaway
3. All eyes on the kitchen and bathroom
Let's face it, the kitchen and bathroom are two mainly used bases in a home. Most renters, especially highly qualified renters, care about the kitchen and master bedroom spaces. Making a few kitchen and bathroom renovations can offer serious returns on your investment and keep you competitive in the Northern Virginia rental market.
Install nice countertops (granite, quartz, slate, etc.)
Update appliances in the kitchen as needed (especially if they are really old and mismatched)
Paint the cabinets a neutral color like white
Add Updated fixtures and faucets in bathroom and kitchen
Paint the walls a neutral color
4. Add square footage or finish an area
While this option is easier said than done, there is a reality that people are being forced to spend more time at home as a result of the pandemic. Space is in high demand, whether it's for a home office or a quiet corner for schoolwork. As a result, adding more space to your property can seriously boost the valuation.
Remember whether you choose to take on a full-scale renovation project or convert an existing space check the pulse (and zoning requirements) of the local market.
Some options include:
Add an extra bedroom, sunroom, or attic room.
Finish the unfinished basement
5. Invest in sturdy & attractive flooring
A property's flooring, like its walls, can take a beating. However, it is an essential aspect of the home that any potential tenant or buyer will notice.
It is always a good idea to research which type of flooring would be best for you - hardwood, laminate, tile, concrete, vinyl, etc. Whatever flooring you choose, it needs to be durable and easy to clean. Remember, you have walkthroughs to consider plus actual day-to-day living traffic. However, an upgraded floor can save you a lot of headache in the long run and yield a better ROI.
Whether small or large, renovating your income property is more than simply upgrading. As an investor, it is always good to acquire knowledge of the local rental market values and competition to achieve the best ROI for your property. A few key updates can ensure owners in Northern Virginia can enjoy long term successful income properties. Talk to us today! We can offer you sound advice about your rental property.