The most effective way to generate the best return on your investment property is by increasing the rental value of your property especially in competitive rental markets like Vancouver’s.
Deciding where best to spend your pennies, however, is always a challenge. The fact is that certain renovations are more likely to reap better rewards than others. Here we’ve outlined 5 ways to potentially boost the rental value of your investment. Of course, the cost of renovations will vary greatly based on location, quality of products chosen and the cost of labour. Make sure you do your research, eliciting more than one quote on any given project.
Both exterior and interior paint remove years of wear and tear from a property making most any space, feel fresh and inviting. This is a comparatively small investment for a big impact.
Update bathroom and kitchen
This may include anything from simply replacing cabinet hardware and faucets, to bigger projects like replacing outdated countertops, adding a new vanity, re-tiling a shower or purchasing brand new cabinetry. Each improvement, boosts the attractiveness of your rental but how far you go, depends on your budget.
If carpets are stained and cleaning them is no longer effective, consider tearing them out and laying wood or laminate floors. In the end, they will last longer than new carpets and are easier to keep clean. Hardwood floors, specifically, makes a huge difference to the value of your rental.
If you have wood floors that are scratched and looking worse for wear, consider sanding and re-staining them. This will immediately improve the appearance of your unit.
Another cheap and cheerful tip that is surprisingly effective is applying vinyl stickers to an out-dated or run down kitchen or bathroom floor (we are conservatively recommending this for smaller spaces). Find these vinyl stickers on Amazon and spend a few hours lining them up over the old floors. Stick to simple, solid colors like the ones pictured below to effectively refresh a space.
Upgrade your appliances
Firstly, if there is no dishwasher, add a dishwasher. Secondly, consider buying a complete, new kitchen appliance package. Often it is more cost effective to buy fridge, stove and dishwasher as a set. Thirdly, if there is space, add an ensuite washer/dryer or upgrade existing ones to newer models. Data actually demonstrates that renters are willing to pay more for ensuite washer/dryer (2018 Builder’s Report).
Modernize a space by opening it up. Consider removing a wall that segregates a kitchen or separates the dining from the living room. This will make the layout more functional and appealing to prospective tenants.
Improve an outdoor space
The 2018 Builder’s Report also determined that people will pay more for an inviting outdoor space. It doesn’t take much more than a good power wash, a bistro set and perhaps a planted palm, to spruce up a patio or balcony. The investment will reap returns!
Add a bedroom
If square footage allows, consider converting an existing room like a den, into a bedroom or creating a room from scratch. An extra bedroom will increase the monthly rent you can ask significantly.
When deciding how much to invest in improvements, consider the 3 governing principles of your investment:
- Maximizing rent
- Minimizing operating expenses
- Increasing the resale value
With these in mind, avoid investing in a property that needs a complete overhaul. Large scale renovations are costly and keep the property from generating income for some time. It is best to buy something that only needs cosmetic improvements.
Also, consider limiting the use of luxury materials. As attractive as they may be, you may not get the return you expected. If you are charging $1000 over competitive rentals in order to pay for the new marble bathroom, attracting a tenant willing to pay this much over market value, may prove challenging. Focus on attractive, DURABLE, materials that will endure and resist the wear and tear of renters.