Keeping your rental property up to date is important to maximizing returns. However, the wrong upgrades can actually work against your bottom line—and not everything you think should be renovated in your rental is necessary for more success.
Operating competitive Detroit investment properties requires smart decisions about what to update and when. How can real estate investors know when they're making the right choices (or the wrong moves) considering renovations? Property owners must prioritize what renters want (and will pay for), but that's not always easy to know. Here's what a Detroit property manager knows about necessary renovations vs. updates that leave you without the cash flow you need every month.
A "Necessary" Rental Property Upgrade Mindset
Upgrades should work for both you and your tenants in your Detroit investment properties. For potential renters, upgrades should increase aesthetic value, comfort, and function. For owners, they should increase resale and rent value. However, keep in mind that not everything you want in a home makes sense for renters—and amenities renters "think" they want don't always make financial sense as a "necessary" upgrade.
When considering renovations, real estate investors must get into a mindset of what's "necessary" to stay competitive, attract quality renters, and not break their budget or risk creating a property that becomes too expensive for the market.
Prioritize Cost-Effective Updates
A Detroit property manager will recommend that investors don't need to overspend on pricey updates that won't pay off. In many cases, durability should be prioritized over stylish or extravagant touches that renters don't care about.
When thinking through thoughtful updates that help renters feel like they get more bang for their buck while making smart investments into your rentals, our property management company recommends options like:
- Durable flooring and countertops. "Durable" doesn't have to mean "ugly!" Today's laminates, tiles, and composite options are reasonably priced, often "look" like the real thing (like hardwoods), and will last through several residents and lease terms—even if they have pets or kids.
- Smart paint colors. "Smart" colors give tenants the flexibility to fit their decor into your home without requesting a change to wall colors. Repainting the interior or exterior of a Detroit rental property is a cost-effective upgrade, but avoid trendy colors to keep your rental attractive to potential residents.
Remember: bold colors might photograph well when marketing your property, but they can also make it hard for potential residents to picture themselves (and their stuff) in your rental home.
Energy Star certified appliances can also be a necessary update when it's time to replace an outdated dishwasher, oven, or laundry machines. These appliances save power without compromising functionality or aesthetics.
A property manager will tell you that many Metro Detroit renters look for homes with energy-efficient appliances. Retiring clunky appliances with more efficient machines helps residents reduce utility costs.
"Necessary" updates can justify a slight rent increase, help your multi-family or single-family property stay in demand, and protect your rentals from outdated aspects that can be unappealing or unsafe for tenants and lead to lawsuits or lengthy vacancies.
Avoid Upgrades That Add More Work for Metro Detroit Tenants
Some upgrades don't add value to a property's bottom line because they are expensive to install, replace, repair, or keep clean. For example:
- Hardwood floors require meticulous care to protect their high-end look, and they're prone to scratches and dents.
- Some high-end countertops require specific products to maintain their look and prolong their use in your rental.
- A bathroom upgrade that includes deep grout can add frustration for residents who have to scrub deeply to keep the grout looking nice and avoid mildew stains.
- Elaborate landscaping can improve the curb appeal, but it also adds more work and maintenance time for residents to keep it looking nice.
When considering new flooring, easy maintenance is an excellent characteristic to keep in mind for your property. Choose flooring and counters that resist stains, scratches, and moisture damage without requiring residents to maintain them with special products or instructions for care.
As property management experts, we've already advised that cost-effective options are often the smartest way to upgrade. However, beware of low-cost contractors or materials when conducting renovations. Tenants can spot poorly executed upgrades, "cheap" work, and materials that won't last as long as better quality options.
If it takes too much work to maintain or is a high risk of breaking before it's been in your rental for very long, a property manager will tell you it's probably not a "necessary" upgrade. If you're not sure about the right upgrades for your Detroit rental property, the right property manager knows what local renters want in a rental home. They can help you maximize your budget on updates that maximize returns.
Avoid Unnecessary Upgrades With Detroit Property Management
The best upgrades strike a balance between keeping tenants happy and managing investor costs for Detroit investment properties. The right upgrades make your multi-family property competitive yet easy to maintain. If you know it's time, but you're not sure about your next investment property renovations, Own It Detroit can help!
We have extensive experience in the market and a reliable network of contractors to deliver thoughtful updates that boost your bottom line. Let's talk about how our property management services can help you build tremendous cash flows from your rentals.
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