What Renovations and Upgrades Should You Invest In First?
Renovating a rental property can be a great way to increase its value and attract better-paying tenants. However, it can also be a costly and time-consuming journey.
Many landlords struggle to solve a simple problem, what order to do home renovations in.
It's important to prioritize renovations and plan them out carefully in order to get the most bang for your buck.
In this post, we'll go over the steps you should take when planning and executing a home renovation on a rental property, as well as the most important things to keep in mind as a landlord.
Step 1: Assess the current condition of the property
Before you start the planning process for any renovations, it's important to take a good look at the current condition of the property.
Walk through the entire property, including the basement and attic, and take note of any issues that need to be addressed before the project begins.
Make a list of items that are in need of repair or replacement, such as leaky faucets, cracked tiles, damaged flooring, or faulty plumbing systems, as it is essential to plan ahead.
Be sure to also check for any health or safety hazards, such as mold or asbestos. This will give you a clear idea of the scope of the work that needs to be done, and will help you budget for your house renovation project.
Step 2: Create a budget and timeline
Once you have a list of items that need to be addressed, it's time to create a budget and timeline for the renovations.
Be sure to factor in the cost of materials, labor, permits, and any unexpected costs that may arise.
Don't forget to also factor in the cost of financing, if necessary. Once you have a budget, you can start prioritizing which items on your list are most important and should be tackled first.
Creating a timeline
Here is a general timeline for completing rental renovations as a landlord:
- Planning: Determine the scope of the renovations, create a budget, and secure any necessary permits.
- Demolition: Remove any existing fixtures or structures that will be replaced as part of the renovation.
- Framing: Build the new structure of the unit, including walls, floors, and ceilings.
- Rough-in: Install electrical, plumbing, and HVAC systems.
- Insulation: Add insulation to walls, floors, and ceilings to improve energy efficiency.
- Drywall: Install drywall to cover the framing, and prepare surfaces for painting or wallpapering.
- Finish work: Install flooring, cabinetry, countertops, and other finish materials.
- Final inspection and clean up: have the final inspection by the local building inspection department, Fix any issues found, cleaning up the unit for ready for showing to prospective tenants.
Step 3: Develop a plan of action
With a clear budget and timeline in place, you can start developing a plan of action for the renovations.
Be sure to consider the order in which renovations should be completed to maximize efficiency and minimize disruption for tenants.
For example, it's usually best to complete cosmetic renovations, such as painting or installing new flooring after all structural repairs have been made.
Also, be sure to designate a renovation free zone or renovation zone if you are only doing a partial home remodel.
Step 4: Start renovating
Now, let's talk about what to renovate/rehab/update and in what order.
Keep in mind that this isn't the only way to do things, but it is a good starting point.
Let's talk about it:
1. Prioritize safety and functionality updates
For many homeowners and landlords, the top priority should be the safety and functionality of the property for the tenants.
This means addressing any health or safety hazards as soon as possible, such as addressing mold or fixing a faulty electrical system.
You should also focus on repairs and upgrades that will increase the property's functionality, such as adding a second bathroom, doing a kitchen renovation, installing new doors, or conducting needed electrical work.
2. Focus on curb appeal
In addition to safety and functionality, it's important to focus on curb appeal when doing a major home renovation.
Curb appeal is the overall visual appearance of the property, and it can greatly impact how attractive a property is to potential tenants.
Simple and inexpensive improvements such as a fresh coat of paint or new landscaping can make a big difference.
3. Consider energy-efficient upgrades
Another important consideration when renovating a rental property is making energy-efficient upgrades.
Not only can this help to reduce the cost of utilities for tenants, but it can also make the property more attractive to environmentally conscious renters.
Simple upgrades such as installing energy-efficient light bulbs can make a big difference.
4. Finish with small touches
After completing all the major renovations, take time to put on the finishing touches.
This might include replacing hardware, updating light fixtures, or adding new window treatments.
These small touches can make a big difference in the overall look and feel of the property.
In summary, renovating a rental property can be a great way to increase its value and attract better-paying tenants.
However, it's important to prioritize renovations and plan them out carefully to get the most bang for your buck.
Renovating Your Property: Step-by-Step Checklist
Now that you have an idea of what updates you'll be doing, it's time to create a renovation plan.
You won't be able to get started until you find contractors to implement the plan, but it's important to get clarity about what needs to be done now so you know everything you'll need to get done to complete the renovation.
Here are some high-level steps:
1. Hire a professional contractor
When it comes to renovating a rental property, it's important to hire a professional and reputable contractor.
A professional contractor will have the necessary experience and expertise to handle the job properly and ensure that all work is up to code.
They will also have access to the proper tools and equipment to get the job done efficiently.
When hiring a contractor, be sure to check their references and ask to see samples of their previous work.
Ensure to have multiple contractors in your list to ensure the best pick.
2. Obtain the necessary permits
Before beginning any renovations, be sure to obtain the necessary permits from the local government. This can include building permits, electrical permits, and plumbing permits; this can be a huge undertaking.
Not obtaining the proper permits can result in hefty fines and even the need to tear down any work that was completed without a permit.
A professional contractor should be familiar with the permitting process and should handle obtaining the necessary permits on your behalf.
3. Keep records of all renovation expenses
As a landlord, it's important to keep detailed records of all renovation expenses. This will come in handy when it comes to tax time and can also help you to keep track of the return on your investment.
Be sure to keep receipts, invoices, and any other documentation related to the renovations.
4. Be mindful of tenant privacy
If you're renovating a rental property that's currently occupied, it's important to be mindful of tenant privacy.
This means not entering their apartments without proper notice and ensuring that their personal belongings are not damaged or disturbed during the renovation process.
It's also important to respect their right to quiet enjoyment and to minimize any noise or disruption during the renovation process.
Be aware of rental laws
As a landlord, it's important to be aware of rental laws and regulations in your area. This includes laws pertaining to rent control, security deposits, eviction, and more.
It's also important to understand any local laws regarding property maintenance and repair. Being aware of these laws and regulations can help you to avoid any legal problems down the road.
Don’t forget about code-related updates
When undertaking a renovation, it's important to consider what local codes and regulations apply to the property and to make sure all work will comply with those codes.
This might mean updating central heating or air conditioning. It’s also good to consider what updated codes and regulations will be in effect in the future.
This will help to ensure that the property is up-to-date and in compliance with all laws and regulations.
Start Renovating
Renovating a rental property can be a great way to increase its value and attract better-paying tenants.
However, it's important to prioritize which renovations are most important and plan them out carefully.
Once you've created your plan, you're ready for the next step: finding great contractors to make your vision a reality and your property market-ready.
