How To Increase Your Rental Income With 6 Cost-Effective Property Improvements

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As a real estate investor, your goal is to make a profit. A great strategy to do just that is to increase the value of your rental property, which could attract prospective tenants willing to spend top dollar for rent.

That doesn’t mean you need to go out and spend thousands of dollars to increase the rental value of your investment property. Instead, here are six ways you can increase the value of your rental property (and increase rental income) without breaking your budget.

1. Boost The Curb Appeal

The outside of your home is the first thing a potential tenant or buyer is going to see. If it lacks excitement or is starting to show its age, then any upgrades done inside the house won’t matter. The prospective tenant is walking in with a bad impression.

In fact, a joint study by the University of Alabama and the University of Texas at Arlington compared similar Denver homes with varying levels of curb appeal, based on Google Street View photos. Those that had well-maintained landscaping (high curb appeal) sold for an average of 7% more than those that had overgrown grass or other blemishes (low curb appeal).

There are a few extra, albeit simple, actions you can take to  make your home pop and help attract renters or buyers:

• Power-wash the outside of your home. This will help remove years of dirt and grime that might be showing the home’s age, and may help save you thousands of dollars on an exterior paint job.
• Feature a focal point. Next, consider the focal point of almost every house – the front door. If it’s in good shape, try painting it and adding new hardware, such as window boxes underneath the front windows. The end result will be an attractive new addition to the front of your rental property.
• Offset the pain points. If the street is loud with traffic and sirens, consider adding the comforting sounds of falling water by way of a fountain to offset the negative sounds. If the street is unusually dark, adding light fixtures can create a more welcoming curb appeal.

2. Paint The Interior

Painting the interior of your rental home can increase your property value and others’ interest in renting it. Dirty, scuffed up walls will happen over time, but will also be a major turnoff to many renters. Choose neutral colors since these will appeal to a wider audience. Grays or different variations of beige and white are great choices throughout the home.

If you’re not in a rush, purchase your paint around Memorial Day, Independence Day or Labor Day. Home improvement stores frequently run sales on paint at these times, which can help save you money. Otherwise, the average cost to paint a home interior in 2021 is just $1.50 – $3 per square foot.

3. Give Your Kitchen A Refresh

Updated kitchens can drastically increase the value of a home. Unfortunately, high-quality updates can also come with a high price tag. Luckily, there are a few things you can do to give your kitchen an updated feel without costing a fortune.

Kitchen cabinets can be a big investment, which means replacing them might not be an option. Instead, consider the following:

• Paint the cabinets. Giving your kitchen cabinets a fresh coat of paint, especially if they’re the right color, will boost moods and rental income.
• Replace the hardware. New cabinet hardware can also help make a big difference in the look and feel of the space.
• Add a timeless backsplash. Adding a backsplash is another cost-effective way to make a big change to your kitchen. In 2021, backsplashes are running an average of $1,000 to install.

4. Prioritize Pets

Millennials are increasingly prioritizing their companion animals as they choose a place to live. They’re looking for features that will allow their animals to thrive. If you’re not allowing pets at the moment, consider making a policy change to attract responsible tenants.

Many landlords choose to charge a monthly pet rent to offset the cost of any property damage incurred by the animal. Whether you choose to hike rent to reflect that or charge renters individually is your prerogative.

As you write your listing, be sure to highlight any of the following features your property may have:

• Secure roof deck. With 35% of millennials parenting cats, a secure roof deck can be the most alluring aspect of a property. Add some patio furniture and a catnip garden to create a cat lover’s paradise.
• Fenced outdoor space. If your property has any sizable amount of grass space, install a fence around it and call it a dog park. Creating a sense of community can also encourage tenants to stick around longer.
• Dog bag stations. You may be concerned about the impending amount of dog poop scattered around your property. Installing doggie bag stations in key locations is a great perk for tenants, and you’ll be maintaining that curb appeal.

5. Install In-Unit Washer And Dryers

The ultimate amenity that ranks high on renters’ wish list is a washer and dryer set. In most cases, prospective tenants are even willing to pay more in rent to have this added convenience.

Both a washer and dryer can be purchased for less than $1,500. That means you can pay off the investment in less than 2 years. After that, it’s pure profit. If you choose a set that has a high energy efficiency rating, you’ll save money on utility bills over time as well.

6. Make Your Home Smart

Smart home devices may not raise the paper value of your home, but they’ll boost the appeal to savvy tenants. Adding smart devices like thermostats, smart security systems, video doorbells, carbon monoxide and smoke detectors, garage door openers, and door locks all can be a big draw to anyone looking at your home.

7. Hire A Property Management Company

While hiring a reputable property management company isn’t a direct investment into your unit, it may be worth the cost anyway. A skilled property manager will have the high-resolution camera and staging equipment to show your unit in the best light, literally. It’s their job to list the rental property where your target market is looking. More demand means you can increase rent.

These companies also screen tenants by calling their previous landlords and doing the heavy lifting to prevent the spiral of events that lead to costly evictions.

The Bottom Line: Keep An Eye On Your ROI

Before you spend money renovating the kitchen and bathroom, it’s important to note the other variables at play. Learning how to improve your rental property will always be beneficial to your tenants and to your reputation. That said, be sure to do your market research on the neighborhood’s median income and make an appropriate rent increase.

Take inventory of your skill sets. What skills could be transferable toward building equity? Be sure to calculate the potential return on investment (ROI) of any DIY projects you’re skilled enough to take on. You may be able to turn your sweat equity into higher rent values.