The Landlord's Guide to Renovating a Rental Property 

Beth Davis

All County Editor

Remodeling research shows that, in recent years, spending on home renovations and repairs has grown to equal the size of the new residential construction market. Because new construction only accounts for 1.5% of the housing stock, existing properties supply most of the housing needed to meet demand. 

Thus, if you own a rental unit, it’s in your best interest to renovate it periodically to keep up with the rental market. So, let’s explore what you need to know about renovating a rental property! 

Why Should You Invest in Renovating a Rental Property? 

It’s simple; you can make more money from rental properties by investing time and money in renovation projects. But the benefits are farther reaching than this. 

Reduce Operating Costs and Maintenance 

Renovations are a great solution when property maintenance takes up too much valuable time or operation costs are eating your profits. 

Therefore, if you invest in necessary upgrades for your rental property, you reduce the time and money it takes to operate and maintain it. Making renovations will also lessen the maintenance requests you receive from tenants. 

Attract Higher Quality Tenants 

Renovating your investment property will attract high-quality tenants: higher-earners with stable incomes who pay rent on time and take care of your property. And when you take maintenance seriously, they will continue to resign their lease agreements.  

Similarly, when you have an attractive property, you’ll have fewer vacancies because demand for your place will be high. 

However, it’s essential to make tenant-friendly renovations. Consider upgrading the outdoor space or including pet-friendly features. Anything that improves functionality is also great! 

Increase Property Value and Rent 

Rental property owners can charge a higher rent after renovations because the property’s value increases. Of course, renovations aren’t the only determining factor in price, but an upgraded property will yield a higher price than a run-down dump in the same neighborhood. 

Increasing the property’s value will also help you build your investment portfolio and put you in a better position to explore other real estate investment strategies. 

Compete With Other Rentals 

To stay competitive with the rental market, you need to make renovations. Prospective tenants are always looking for the best properties, so you’ll lose out on rental income if yours lacks certain features most of your neighbors have. 

If you’re unsure what your property needs to stay competitive, ask an experienced realtor for real estate comps in your neighborhood. 

Tax Deductions 

You’re likely already aware of the tax benefits of owning a rental property. But did you know that many renovation projects are tax deductible? “What expenses can I deduct when renovating a rental property?” you may ask. 

Some examples of expenses you can likely deduct the same year you incur them include: 

• Installing new light fixtures 
• Landscaping 
• Modernizing windows and doors 
• Painting 
• Refinishing countertops or cabinetry 
• Repairing old flooring with new floors like laminate or hardwood flooring 
• Updating major appliances

To maximize tax deductions on your rental income, consider hiring an accountant. 

How to Prioritize Rental Property Renovations 

It can be overwhelming to know where to start if your property has a list of renovation projects needed. This is especially true for those with a limited budget.  

Generally, you should start with projects that have the biggest impact on the property’s value because this determines how much you can increase the rent. 

However, if anything is in dire need of repair, you should repair it first, as it will likely be the subject of complaints. This includes things like faulty appliances or leaky faucets.  

Also, consider the project’s return on investment (ROI). The higher the ROI, the better. 

Below are a few more tips to follow regarding the prioritization of renovations. 

Simple Fixes and Preventative Maintenance 

Making simple fixes will help keep your property as low-maintenance as possible because you prevent minor problems from becoming big ones. You may even be able to complete some of these fixes as DIY projects, which will help save money. 

Additionally, add these simple preventative measures to your maintenance checklist to reduce issues: 

• Check HVAC filters and replace them as needed 
• Check sink drains for debris and unclog when blocked 
• Clean the dryer exhaust and vents 
• Clean the garbage disposal 
• Clear the gutters 
• Flush out the water heater 
• Inspect electrical cords for wear 
• Test fire alarms 
• Trim tree branches 
• Wipe down grease buildup from the backsplash, cooktop, and surrounding areas 

Kitchens and Bathrooms 

While the living room or primary bedroom may seem like crucial features of the home, any realtor will tell you that the kitchen and primary bathroom outshine them. Not to say these rooms aren’t important, but if you want to renovate, start with a bathroom or kitchen remodel.  

Why? 

Bathroom and kitchen renovations have the biggest ROI of any home improvement project because they increase tenant satisfaction. 

You can make simple upgrades, like installing a new shower head in the bathroom or adding more storage space in the kitchen. While you can make plenty of other amazing upgrades, don’t spend so much that you don’t recoup the costs. 

Appliances 

Replacing old appliances with new, energy-efficient models is great for both you and your renters. Some major appliances that may need updating include: 

• Dishwasher 
• HVAC system 
• Microwave 
• Oven and cooktop 
• Refrigerator 
• Washer and dryer 

Paint 

A fresh coat of paint can go a long way in making a place go from drab to fab. Also, fresh paint is an affordable way to show tenants you care about them because it transforms the living space into a new, clean environment. 

Tip: choose a neutral paint color to avoid turning off any potential tenants. 

Curb Appeal 

When investing in a rental property renovation, consider curb appeal: the overall appearance of your property. 

Your home’s curb appeal is the first impression potential tenants will get from your property. Inexpensive ways to increase your property’s curb appeal include: 

• Installing outdoor lighting 
• Planting flowers 
• Washing the home’s exterior 

Property Management for Your Rental Property 

The bottom line is that renovating a rental property has more benefits than drawbacks. So, make a list of upgrades you’d like to make, create a budget, and get started with your first project. 

When your property looks fresh and ready to accept tenants, your next step is to find a property manager, such as one from All County. Our team can help you find long-term tenants for your property (and much more)! 

From California to New York and many states in between, we have locations to have you manage your rental properties.