Renting out a property is a smart investment strategy if you’re looking to beat high inflation rates. With rental prices rising by around 5% each year, now is a great time to start getting passive income.
But just having a property to rent isn’t enough. To make money, you’ll need to be able to attract potential tenants, which is no mean feat. For that reason, renovating a house before you rent it out can be a smart move if you’re looking to attract tenants and increase your rental income.
Here’s what you need to know before you carry out renovations on your rental property.
Budget
Firstly, it’s important to budget when looking at your renovations. If you overspend and get yourself into serious debt, there’s no guarantee that your rental property will bring in enough to cover this!
So, the first step is always looking at how much you can afford to spend on the renovations, so they don’t eat into your profit.
If you know that you’ll need to take out a loan, it’s a good idea to improve your credit score to get the money you need.
Decide on the type of tenant you want to attract
Not all tenants are made equal! So, it’s crucial to spend some time thinking about the tenants you want to attract. For example, if you want to attract families or older residents, you probably won’t need to furnish the house.
But if you’re targeting students and young professionals, a fully-furnished property is likely to be much more appealing.
Make necessary repairs
Nobody wants to live in a property with a leaky roof or broken door handles. To get top dollar for your rental, you’ll need to spend time addressing any damage to the property.
Be sure to fix the basics before you move on to more cosmetic work. For example, fixing leaks, repairing broken fixtures, replacing damaged flooring, and ensuring your plumbing is in good working order is the first port of call.
Upgrade the kitchen and bathroom
If the kitchen and bathroom are looking tired, you might want to consider upgrading. These two rooms can make or break a home, so by ensuring that these are newly renovated, you’re far more likely to have tenants fighting over your property.
Paint and flooring
A lick of paint and a fresh wooden floor can transform your rental property from drab to fab! To make sure that your property appeals to a wide range of buyers, opt for classic wooden flooring and neutral-coloured walls.