To achieve the greatest return on your rental property investment, you need to make a consistent and long-term property renovation budget. While properties being rented out do not usually need a complete “flip” renovation, it is important to know where your property renovation budget should be allocated to have the best effect on the Kennesaw market in increasing the rent value.
Practiced property investors recommend allocating your budget for property renovation on the main features of the property based on the following percentages:
- Kitchen: 30%
- Bathroom: 20%
- Exterior: 20%
- General Improvements/Other: 30%
After determining the areas of your property that fall under these percentages, factor in the overall worth of the property and take a percentage of it. For example, if you have a $40,000 property renovation budget based on 10% of a $400,000 property value, it will look like this:
- Kitchen: $12,000
- Bathroom: $8,000
- Exterior: $8,000
- General Improvements/Other: $12,000
Bear in mind that each adjustment needs to consider your target market and what will maximize value for your eventual Kennesaw residents. List each room and feature of your property and utilize your prepared property renovation budget to find what needs the most improvement (you do not need to use the whole budget).
Several property investors will want to maximize their property renovation budget by entirely redoing the kitchen or bathroom; however, it is crucial to keep costs minimal and find what needs the most work. For example, you could keep the main kitchen body and just replace the floors, sink and faucet, put in new appliances, and paint the cabinet doors or add new handles. Bathrooms can generally stay the same with their walls and layout; however, you could place a new shower head or heads, toilet, or vanity based on your vision for a more clean and modern look. If there are pieces from your property that you do not want to keep, consider using a second-hand market by selling them to have more funds for adding new items. Alternatively, to cover costs, some Kennesaw investors might purchase from the second-hand market or a community online classifieds section to find lower cost items for kitchens, bathtubs, windows, and doors.
Generally, a complete renovation with your Kennesaw property renovation budget will most likely always add additional value. However, overcapitalizing can become a factor, especially when rental values could change depending on the market. As such, ensure that your budget fits your goals and that you do not perform pricey renovations that are not needed to attract higher rent.
In establishing the most important items to focus on with your property renovation budget, we have found that these items have a tendency to attract a higher rent value:
- Updating the kitchen and bathroom to be more modern
- Adding blinds/window dressings and floor coverings
- Including privacy features
- Outdoor living areas and fencing
- Ease of access to rooms
- Natural lighting in the home
The most vital part in renting to Kennesaw residents is to have the best presentation that you can to make a positive impression with your prospective residents that will last even after they decide to live in your property. Furthermore, prior to contacting you, potential residents will often drive by the property itself to view the condition. If they are impressed, then they will contact you for more information. If not, they may move on to the next rental property. As such, curb appeal will help attract and retain quality residents. An effectively planned property renovation budget will result in careful consideration of all the costs needed to allocate the right resources and time to what matters most to your future residents.