Not doing enough rehab won't attract quality renters. Too much rental property rehab can make it too expensive for renters who want to live in the area. So, what's the ideal amount of rehab for your Detroit investments to help residents feel at home?
Every property is different, but real estate investors can follow some universal guidelines to apply ideal renovations that keep a property competitive and profitable.
Is there really such a thing as too much property rehab? Absolutely. If you don't choose a turnkey investment solution, you'll need to understand what renters want and incorporate it into your properties without overdoing it. As a full-service investment company, Own It Detroit has the best experience to offer insight as rental property renovation experts.
Here's what investors need to know!
More Rehab Doesn't Always Equal More Rent
- Making your investment property the fanciest, most expensive rental on the block doesn't necessarily translate into more rental income.
- When a rental home is more expensive than nearby properties, discerning renters will choose 'affordable and efficient' over fancy almost every time.
- When buying real estate for sale in Detroit that needs extensive renovations to make it rental-ready, consider what renters want versus what you would like to have in a private residence.
- Thinking like a business and property owner must take priority over adding the latest homeowner must-haves to your rental property.
It's Not a Forever Home
- Most renters aren't looking for a rental home to be their 'forever' home.
- Your rental properties don't need to compete with the latest trends that homebuyers look for in a new house.
- Your rental properties should provide quality housing and amenities at an affordable rate to generate enough profit for you—without overpricing the property to cover expensive renovation costs.
Understanding what renters want from your Detroit investments can help drive the right rehab decisions for each property in your portfolio.
- Too much rehab creates a desirable home—but it might not meet the needs or budgets of local renters.
- An overpriced rental home will sit empty and cost you money, even if it's the nicest house in the neighborhood.
- An expert full-service investment company like Own It Detroit helps investors understand the local market and provides turnkey investment solutions that renters will fall in love with—and can afford.
Put ROI—and Renters—First
Working with the best local property manager can help you plan and estimate the impact of upgrades for a Detroit investment property. Preparing a home for the rental market must make good sense from an ROI perspective while meeting renters' demands.
When analyzing renovation ideas:
- Run the numbers before committing to too much rehab.
- Compare your planned renovations and rental rates to similar properties in the area.
- Put personal preferences aside and focus on what renters want (and will pay for)
Let budgets and income potential drive your rehab decisions: If it doesn't make good financial sense, don't include it in the renovations for a property.
Choose Smart Upgrades Over Time
Once a property is rental-ready, it will need ongoing upgrades from time to time to stay competitive. However, in most cases, 'upgrades' don't require a complete renovation to keep your property in-demand and occupied.
When inspecting your properties, keep an eye out for aging aspects of your properties and opportunities to make smart upgrades. Sometimes, small updates can make a big difference in the quality of your Detroit investments—and justify a reasonable rental rate increase, too.
Quality upgrades don't have to be expensive when you buy real estate for sale in Detroit! Choose updates that impress renters without requiring costs that you'll never recover with a competitive monthly rent price. These kinds of upgrades can include:
- Painting kitchen and bathroom cabinets to stay with current trends (without being too trendy)
- New light fixtures
- New bathroom and kitchen faucets
- Smart home features
- New (durable) flooring
- Updated curb appeal
- New countertops
- New appliances.
When it's time to find a new renter, highlight these upgrades in your property listing to attract quality prospective renters.
What Kind of Rehab Doesn't Pay Off?
Skip these rehab ideas if you want to build a profitable real estate portfolio. Investors can spend too much money on these updates that renters don't want and won't pay for:
- Elaborate landscaping
- Closet organization updates
- High-end countertops and flooring
- Expensive window replacements.
These updates aren't bad ideas for a fix-and-flip project. However, in most cases, they aren't necessary for a rental property and can make your properties less desirable for quality residents.
A Property Manager Guides Investors on Ideal Updates
Determining the correct amount of rehab for Detroit turnkey investments can be challenging. Working with a best-in-class, full-service real estate investment team is the best way to make appropriate renovations that attract your best renters and increase long-term wealth!
Own It Detroit has years of experience with property renovations in the Detroit rental market. Learn more about how to successfully invest in Detroit with the skills of expert property management when you download your free copy of our real estate investing guide.