When improving your investment properties, it’s crucial to identify which enhancements bring a healthy return on investment—and which don’t. One of the frequent mistakes rental property owners can make is allocating funds to upgrades that do not add much value or improve the overall appeal of the rental home to potential occupants.
Knowing the upgrades to avoid can lead to smarter investment decisions regarding property improvements. Real estate professionals consistently caution against three upgrades to steer clear of: elaborate landscaping, the installation of hardwood flooring, and extensive smart technology features.
Don’t waste money on elaborate landscaping
Attractive, low-maintenance landscaping is a key feature for a rental home. Most tenants favor yards that are easy to upkeep. Upgrading your rental property’s landscaping by incorporating many decorative plants and trees or installing intricate flower arrangements paired with a large, lush lawn may seem like a valuable addition. Curb appeal does play a role in the value of a rental home.
Nevertheless, a high-maintenance yard typically doesn’t add much to the property value or renter’s satisfaction. While initial impressions of beautiful landscaping might draw interest, tenants could soon see it as too much work and either neglect your property or choose to move out. When landscaping a rental property, remember—simple is better.
No need for expensive hardwood flooring
Wood flooring is favored by homeowners for its natural style and warmth. That said, it requires frequent upkeep and is prone to damage from water leaks or mishandling. Also, consider whether renters will take the time to adequately care for a hardwood floor.
Although wood flooring may be a desirable upgrade to some, most renters are content with a low-maintenance look-alike option. Because natural hardwood is one of the more expensive upgrades, chances are slim you’ll recover the installation cost, even if you increase the rent.
Keep smart tech installations to a minimum
In the modern rental landscape, property managers and landlords might lean toward installing advanced technology like smart thermostats, keyless entry systems, and energy-efficient appliances to attract tenants and remain competitive.
However, property owners should assess the cost versus benefit before going high-tech. Although such technologies offer convenience and efficiency, they come with a significant price tag that may not generate a strong return on investment.
Smart systems often require setup and ongoing maintenance expenses that reduce overall profitability. Advanced security features may seem beneficial but typically do not significantly affect rental rates or tenant satisfaction. Moreover, technologies can become outdated quickly, leading to costly upgrades. Plus, technical issues may demand specialized service, increasing operational costs. Consider the risks before you integrate new technology into your property.
Evaluate cost vs benefit before renovations
Focusing on profitability and tenant satisfaction should guide your upgrade strategy. While fancy cosmetic enhancements and complicated tech installations might look appealing, they aren’t always the best investment. Opt for cost-effective upgrades that provide real value—like essential maintenance and improvements that extend the property’s life and usability.
Seeking to maximize the return on your investment properties in Bannock County and the adjacent area? Consider working with Real Property Management Pocatello! We’re always available to assist you in achieving your goals – give us a call at 208-234-1000 or send us a message online.
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