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Finding the right mix of landscaping solutions for your rental property can be a challenge. As a rental property owner, you need to strike a balance between your desire for an attractive property and the necessary investment (both time and money) to maintain it. These cost-efficient, low-maintenance ideas will help you get the most out of your rental property’s outdoor space.
3 Questions to Consider Before You Start Your Rental Property Landscaping Project:
Before you start, pay attention to these three considerations that are important in any rental property landscaping project:
1. How much will landscaping increase the property value and monthly rent?
Many landlords don’t think of landscaping as an investment. More often, they view landscaping as a necessary nuisance. They want enough curb appeal to keep the rental value as high as possible, but also want to keep their expenses as low as possible.
With low-maintenance landscaping, long-term investment in a few key enhancements will keep your replacement costs low and make your rental property more attractive to tenants who will pay more to rent a well-landscaped home.
Most tenants will expect the property to be both attractive and functional. If you have a rental property in a high-end community, this expectation increases, along with the monthly rent you can charge. But similar to interior improvements and renovations, you don’t want to over-renovate your rental property landscaping — be sure to keep in mind your rental competition and return on investment.
2. How can you optimize the space for your tenants?
Keeping tenant-friendly landscaping in mind is key for attracting quality tenants to your rental property. If you allow pets, make sure your outdoor space is pet-friendly (for example, by including a durable fence and a grass area) and won’t be easily ruined by a tenant’s pet.
If you’re renting to multiple tenants or a family, a lawn, grilling area or other communal space for their enjoyment will likely add value and interest to your rental property. Creating an outdoor common space may take a little upfront investment, but many outdoor spaces are easy to maintain and will increase your property value.
3. Who is responsible for yard maintenance, and is that responsibility defined in the lease?
Most cities have ordinances regarding the length of the grass, leaf and debris clean-up, and snow removal. Many homeowners’ associations also have bylaws that outline requirements for any landscaping improvements as well as expectations for regular maintenance.
If your rental property’s landscaping includes specialty plants that need extra care, or lawns that need to be mowed every five days like clockwork, you’ll want to explain that clearly in the lease. Outlining landscaping and yard maintenance expectations in the lease will help you avoid potential conflict over maintenance issues with your tenants. If you offer a landscaping service, you may want to incorporate that into the property’s rent price.
Use our customizable lease templates to outline who is responsible for rental property landscaping.
Low-Maintenance Landscaping Tips for Your Rental Property
You’ll want to start by assessing your outdoor space and making some decisions on landscaping and plants. Consult your local garden center or landscaping company, or visit the USDA plant hardiness zone map to ensure you choose proven and hardy plants that will thrive in your area. When in doubt, stick with plant varieties native to your region — they’ll require the least amount of maintenance.
Grass
You can find low-maintenance grasses that need minimal watering and mowing. Replacing grass will have an upfront cost, but it will save you time and money on maintenance. These types of grasses will typically be easier on the checkbook and look beautiful year after year.
- No-mow grass seed mixes are usually fine fescue (flowering grass plants) mixed with a ground cover seed such as clover, moss, or monkey grass. No-mow lawns only require regular watering in the beginning; after that, you only need to mow once a month (or less), depending on how tall you like your grass. No-mow grasses are hardy and need very little water, fertilizer, or chemicals to keep them looking good.
- Low-water grass seeds are a fescue mix, and once established, these low-water grass options require very little water. There are a handful of low-water grass options, including Fleur de Lawn (a wilder variety of grass with flowers) or Bluestem Enviro-Turfm (a durable, drought resistant lawn). You won’t need to hire a service, install an in-ground sprinkler or ask your tenants to help keep the lawn lush and green.
- Single varietal grass seed are the best option if you prefer grass that looks consistent and manicured. Unfortunately, if you prefer a traditional lawn, you’ll have a harder time finding a low-maintenance grass option. These single varietal seeds take both careful watering and regular mowing. For this type of grass, you should probably consider a watering system (an in-ground automatic system will best protect your grass investment).
If you don’t want to install a watering system, you can provide sprinklers and instructions for your tenants to use and maintain the lawn, or hire a service to do this for you weekly.
Plants and Flower Gardens
If you are partial to evergreen or flowering plants, you’ll want to turn to perennials. Plant them once, and these beautiful and hardy plants will bloom to add attractive color to keep your yard looking stylish and inviting year after year.
You can use perennials to control the lawn or garden border, prevent soil erosion, and minimize the maintenance needs of a full lawn. Keep these considerations in mind when you plan the garden at your rental property:
- Flowers: A flower garden doesn’t have to be flowers only — the garden can include low-maintenance evergreens and other bushes. Evergreen bushes and other dwarf shrubs like boxwood, hydrangeas, and spirea will help you build an attractive, low-maintenance garden.
- Weed control: For weed control in your flower or perennial garden, skip the black weed liner. Liners take a lot of time to install, and over time they break down, allowing weeds to peek through and take over. Instead, consider different types of mulch, pea gravel, rubber mulch, or rocks to prevent weed growth.
- Watering systems: You may not need an automatic watering system if you design your landscape accordingly. There are drought-resistant perennials for all types of planting zones, and many drought-resistant perennials can survive with the natural rain cycle.
- Hardscaping: This form of landscaping is more prevalent in desert climates, since it incorporates hard landscaping materials (like stone, brick or wood) into your outdoor space. Still, landlords in any area of the U.S. can make good use of hardscaping options to reduce their expenses for exterior maintenance and make their outdoor landscaping multifunctional. Popular hardscaping designs often include decks, patios, and decorative brick or stone garden designs.
Pick the Right Landscaping for Your Climate
Back to that plant hardiness zone map! For easy maintenance and lower costs over time, choose plants that are appropriate for your property’s environment and climate. If you want to branch out, here are a few other low-maintenance landscaping options.
- Turf or synthetic lawns: Turf and synthetic lawns have improved in both quality and appearance since they first came on the market. Artificial lawns don’t require water or mowing (great for areas with little rain or prone to droughts), and most people can’t tell the difference between turf and real grass. To keep your artificial turf looking nice, you can take the hose and spray it off occasionally.
- Succulents and Xeriscaping: Succulents are tough plants that are beautiful and rustic looking. Cacti, aloe, agave, and hardy grasses are popular in Xeriscape landscapes (mixing hardscape materials and succulents to create an attractive and drought-tolerant landscape). If you live in a mixed climate with extreme heat and little rain, Xeriscaping with succulents is a great low-maintenance option.
- Wetland Plants: If you live in a rainy area, you’ll want plants that thrive in a wet environment. A few low-maintenance options for flowering and non-flowering plants that love water include dogwood bush, inkberry bush and marsh marigolds. You may also want to consider planting a layered natural rain garden of water-loving trees, smaller perennials, flowers, and grasses.
- Native perennials: These plants will die off when the temperature drops and the snow falls. But don’t despair — these plants will rebound the following season. Evergreens are a great addition in a cold climate, because they add a vibrant and reliable pop of green when everything else is white or grey.
- If you have ample shade and moisture, hostas, moss, or other shade-loving perennials will thrive and keep your yard looking beautiful.
Keep Pets in Mind as You Landscape Your Rental Property
Pets — especially dogs — need room to run and play. Unfortunately, their claws dig up the grass, and they can leave a ruined lawn in their wake. Here are a few tactics to keep the lawn and landscaping looking beautiful, even if you have pet-owning tenants.
- If you allow tenants to have pets, your rental agreement should have written expectations for pet owners. Be clear about requirements to pick up after pets, and specify any designated pet-friendly areas in the yard.
- Landscape the yard to be pet-friendly and to avoid future maintenance costs. This can be as easy as setting aside pet-friendly areas. Fences and rock gardens are your best bet for maintaining the overall look of your yard, but if that’s not possible, watering the grass frequently will help keep it from turning yellow.
- Consider dog-friendly landscaping materials such as pea gravel or small pebbles. This extra layer of drainage material will help filter the urine, making it easier to pick up dog waste and protect the grass. Plus, the gravel is small enough not to injure the dog’s paws.
Know Your Local Ordinances
As a landlord, it’s essential to make sure your landscaping complies with local ordinances. Get a copy of the green space rules and a list of prohibited plants or grasses. Following ordinances will help you avoid any fines or the need to replace plants or other landscaping features after starting your project.
The right landscaping for your rental property can increase your property value and allow you to raise your rent. Once you’ve renovated your outdoor space, make sure you know how to write an impressive rental listing to highlight your property upgrades and attract quality tenants.
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Most landlords recognize the property management advantages of installing smart devices in their units, but the question over financial advantages of such upgrades is less clear-cut. Luckily, more data around the bottom-line benefits of smart home amenities is starting to emerge.
More than 75% of surveyed renters said they would pay more in rent for a package of their top three smart home amenities, and more than half said they’d be willing to pay rent increases of at least $20 a month.
A similar study conducted by smart locks and security systems company Schlage found that 55% of millennial renters said they would be willing to pay more for a rental unit with high-tech door locks. On average, the study found millennials were willing to pay about 20% more for units with smart home features.
But different smart home devices may have different ROI potential, and automation and surveillance features that might appeal to homeowners could feel like a breach of privacy to renters.
Given the data available, these are the smart home upgrades that look to have the greatest value for landlords and their rental properties:
Smart Safety Features
Because renters report improved safety as one of the most appealing factors of a rental property, smart safety features are a promising area to invest in when upgrading your property.
Smart locks are one of the more popular smart home devices for landlords and tenants, since a physical key isn’t required. Most smart locks are opened via pin code, bluetooth connectivity or by scanning a smartphone, and landlords don’t have to replace the locks and keys when a tenant moves out or deal with tenants locking themselves out of the unit.
Keep in mind that lower-end smart locks provide less security (pin codes can be shared and buttons get worn out), and stories of smart door locks being susceptible to hackers have made some renters nervous about seeing such systems installed in their own units.
If you decide smart locks aren’t a good option for your property, consider investing in smart outdoor lighting that’s motion-activated. Smart lighting helps tenants get safely up the walkway in the dark and can scare off would-be intruders.
Another safety option is installing smart cameras at building entrances. Cameras give tenants additional peace of mind that the comings and goings around the building are being monitored. They can also deter thieves from snagging packages — a nice feature if you don’t have a doorman to receive deliveries. Smart video monitoring for your building is inexpensive and easy to install, but keep in mind that cameras will need to be maintained or replaced if necessary.
Utility Savers
Tenants recognize the value of lower utility bills, so devices like smart thermostats or smart plugs (which allow you to turn off electricity to specific outlets remotely) help renters save money and help prevent accidents if something gets left on.
While there can be an upfront cost to installing smart thermostats or smart plugs, both are relatively easy to install and typically sought after by tenants. These utility savers help tenants manage the property — even when they aren’t at home — and more importantly, can prevent accidents, which will save a landlord time and money.
Moisture Sensors
Pooling water can become a big issue, fast. Unfortunately, if an issue originates in the building’s basement, a washing machine, or under a tenant’s sink where it’s hard to spot, it can often go unnoticed long enough to do real damage.
Installing smart moisture sensors in such areas is a relatively inexpensive insurance policy you can set and forget. The system will trigger as soon as an issue is detected and could save you thousands of dollars in repairs. If you own a property with a basement or another at-risk area that’s not regularly monitored or used daily, installing moisture sensors could save you a major headache.
Determining ROI From Smart Home Devices in Your Rental Property
Calculating the return on investment you’ll get from any smart home device that you add to your rental property is essential. A rental with the right smart home devices should ideally help you find quality tenants, raise the rent on your property, and save you time and money in the long run.
Some smart home devices — like a high-end smart lock for the front door — might cost you more upfront, but will also help attract tenants who are ready to spend more on rent to live in a tech-savvy property. As a guideline, you wouldn’t want to spend significant money on a smart home feature if you don’t think you’ll be able to make that money back in rent (or in savings on other maintenance or operating costs).
Check out other listings in your area to see if properties are offering smart home devices, and if they are, see what they are charging in rent. Make sure that your rental is located in an area where smart home devices would be desirable for tenants, and choose the smart home devices that suit best your property needs.
Once you upgrade your property, make sure you highlight your new smart home devices in your rental listing.
Smart Home Device “Don’ts” to Keep in Mind
Just as important as smart tech “do’s” however, are the “don’ts” — or at least the “don’t just yets”. In an article by CNET, some tenants expressed dissatisfaction with their landlords’ decision to add smart technology to their units without the option to opt out.
In one instance, the article quotes a tenant who got locked out of his unit when a new smart lock was involved. To resolve the issue, maintenance personnel connected the smart lock to the tenant’s personal home network without permission. The breach of privacy was nearly enough for the tenant to move out.
Some smart home devices collect data on users to sell to advertisers. Tech-savvy tenants know this, and expect landlords who choose to invest in smart home features to do their research to protect their residents’ information.
Still, smart home features that enhance safety, lower utility costs or add to convenience for tenants without sacrificing their privacy can be a real draw to renters. Just be sure you know how data is stored, how to manage the system, and how to talk with tenants about the value before you go all-in.
Once you’ve updated your smart home devices, it’s time to assess your landscaping and outdoor areas. Our next chapter will walk you through some low-maintenance landscaping tips to get the most out of your rental property.
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There are a few big-ticket items in a rental property that landlords usually avoid replacing unless it becomes a necessity. Property owners often put off replacements for HVAC systems, water heaters, roofing and siding — but windows are a favorite avoidance of all.
Windows fall in the big-ticket column for a reason; they cost quite a bit of money compared to other updates in rental properties. Landlords can usually raise the rent after they put in new flooring or update the kitchen and bathroom, but they don’t often see the same return on investment for new windows.
If you’re considering replacing the windows in your rental property, you’ll want to carefully evaluate the current windows to make sure the timing is right.
Here are 5 indicators that signal it will soon be time to replace windows:
- Moisture on the inside of the window
- Condensation between the panes of glass
- Air leakage
- Broken or cracked panes
- Problems with opening and closing
Windows, like other daily-use items, wear down and need to be replaced every 15 years on average. This time frame will vary due to several factors, such as the quality of the window, climate, and window maintenance.
Note that the quality of the window often trumps climate and maintenance — high-quality windows require little yearly maintenance and are built to withstand even the harshest climates.
Measuring Window Quality for Rental Properties
A U-factor and R-factor are the measurements of a window’s quality and efficiency. The U-factor tests the transfer of heat through the glass; when the U-factor is lower, the energy efficiency is better. The R factor tests a window’s heat resistance or insulation to prevent heat loss; when the R-factor is higher, the energy efficiency is better.
Windows with higher ratings will be:
- A higher-quality window that lasts longer
- Easier to maintain
- Better looking, adding to curb appeal
- More efficient for tenants by keeping heating and cooling costs low
The National Fenestration Rating Council conducts these ratings, providing information to measure and compare the energy performance of windows, doors, and skylights.
The Average Cost of Windows
The cost of new windows will vary dramatically depending on the quality of the window you purchase. In some cases, you’ll need to determine whether you can retrofit an existing window or need to opt for a full replacement.
With all the options available, it’s important to consider the price and performance of the window. Vinyl windows, wood windows, and fiberglass or composite windows are the most common windows on the market today.
Vinyl Windows are cost-effective and efficient but have aesthetic drawbacks. They can’t be painted and are usually white.
Wood windows, on the other hand, are on the higher-end of the cost scale. They have higher maintenance costs because they have to be stained almost yearly. However, wood windows can be customized by look and build to match your home’s styles.
Fiberglass windows fall in the middle. They are mid-range on cost and they can be customized to match the exterior.
However, most property owners stick with vinyl. Vinyl windows are cost-effective and keep maintenance, heating and cooling costs low.
According to Homeadvisor.com, per-unit costs for a replacement window range from $75 to $1,500, plus another $100 to $300 in labor, depending on the material. Even with deep pockets, the price of windows can add up quickly.
Windows With the Best Value for a Rental Property
Consumer Reports has conducted numerous tests on replacement windows to determine which windows offer the best value for the price and performance. Here’s what they found, priced from lowest to highest:
- Vinyl casement: American Craftsman by Andersen 70 Series, $260
- Vinyl double-hung: Simonton Pro-Finish Contractor, $260
- Wood double-hung: Andersen 400 Series, $310
- Wood casement: Andersen 400 Series, $400
- Fiberglass double-hung: Integrity from Marvin Ultrex, $450
When considering replacement windows, the cheapest option isn’t always the best. If the windows are not good quality, your tenants will end up paying more in heating and cooling and may look for a new place to live. Curb appeal is also important — you want windows that complement the rental property to keep the exterior looking its best.
Are Replacement Windows Tax-Deductible?
It can be hard to take out the checkbook to buy new windows. However, as a property owner, you need to look at the overall picture, which includes taxes and cash flow.
Replacing rental property windows is tax-deductible, but how the replacement will affect your overall profits and losses depends on the type of replacement or repair. When it comes to taxes, your window investment falls into one of two categories:
Repair: When you fix or replace a window due to breakage or misuse. As a landlord, you can expense window repairs like any other maintenance item. This means the cost will be deducted against income that the property earns.
Capital improvement: When you replace a window to improve the overall value of the property, either in curb appeal, tenant comfort, or functionality of the window. Capital improvements are any repairs or replacements that increase the value of the property or extend the useful life of the property.
The depreciation for a capital improvement is 27.5 years. This means you’ll get paid back over time as the “usefulness” of the window is depreciated. Windows are considered capital improvements because they are part of the overall building structure.
Also keep in mind that if your current windows are causing good tenants to complain, those windows could cost you money in the long run. When deciding whether to replace anything in a rental property, landlords need to consider a potential loss of cash flow that could result from losing quality tenants. Keeping your tenants happy and in place by maintaining your rental property is one way to help safeguard future rental property cash flow.
Taking Your Area’s Climate Into Account
Your rental property’s climate is another important factor to consider when you’re replacing windows. Some windows are better suited for certain climates than others, so it’s important to know what to look for.
Storm-prone areas: Is your property in an area of the country that experiences extreme weather conditions like tornadoes, hurricanes, or high winds and rain? This type of weather activity will cause windows to break down faster than a mild climate. A chemically treated window with tempered glass and good insulation should protect the rental property from the high winds, rain and pressure changes.
High heat: Heat is another factor that affects window efficiency both inside the property and out. When the outside temperatures climb, you want your windows to maintain their energy efficiency and keep the cool air inside and the hot air outside. You’ll want to consider windows with the best insulation and a high R-factor (with the lowest heat conductivity). This will help keep energy bills under control and air conditioning more efficient during the peak of summer.
Extremely cold winters: To protect tenants from the elements, rental property owners in colder climates need the best windows. Frost and moisture can easily lead to cracking and rotting windows in colder parts of the country. Buying windows with the best insulation and a high R-factor (with the lowest conductivity) is a necessity to keep energy bills under control during the cold winters.
Coastal conditions: Waterfront properties deal with a combination of weather elements at the same time: saltwater, high winds, humidity, and sudden temperature changes. These elements will damage windows over time. Consider purchasing replacement windows with tempered glass, good insulation, and low conductivity to keep your rental comfortable year-round.
Fault lines: Temperature and moisture are not the only considerations when it comes to window efficiency — slight movements from earthquakes can take their toll on window materials as well. If you own rental property in an earthquake-prone area, it’s essential to buy windows with tempered glass or panes that have been sprayed with special chemicals to help prevent shattering and strengthen the integrity of the window.
Fortunately, replacing windows in a rental property isn’t an everyday or even a yearly requirement. But armed with the best tips and tricks, you can choose the most efficient and cost-effective windows for your rental property and while balancing renovation costs.
Evaluate Other Rental Property Upgrades and Manage Maintenance
Rental properties that offer upgrades and updated appliances are able to command higher rents, so if you’re making an investment in new windows for your rental, it may be a good time to evaluate other potential upgrades.
Once you’ve spent time and money on rental property updates, make sure your property stays in great condition by using a rental property maintenance tool. Your tenants can easily alert you about maintenance issues or any needed repairs, and you can keep track of all your maintenance requests and needs in one place. Learn more about the Avail maintenance tracking feature for landlords.
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Deciding whether or not you should renovate your rental property — and which parts of it to renovate — is no easy task. Unlike renovating your own home, rental property renovations come with a few additional considerations.
Before you start, make sure you’re renovating your rental property for the right reasons. These four worthwhile reasons to renovate will help you attract better tenants, secure some return on investment, and hopefully make your life as a landlord easier.
1. Reduce Your Rental Property’s Maintenance and Operating Costs
One major reason for renovating a rental property is to reduce the time and money you spend maintaining it. If property maintenance is taking up too much of your time or operating costs are eating into your checkbook, a renovation could help fix that.
Upgrading old appliances or features in your property could save you from constantly having to deal with repairs and tenant complaints. Making those same upgrades (especially if you’re installing energy-efficient appliances or certain smart home features) can also save you money on your rental property operating costs. Essentially, renovating your rental property to reduce costs and maintenance requests should make your life as a landlord easier, while saving you time and money.
2. Attract Higher-Quality Tenants
A second reason you’d renovate your rental property is to attract higher-quality tenants (and keep them). If you’re renting your run-down, outdated property to college students, but you’d like to raise the rent and get more stable, higher-earning tenants into your property, you’ll likely need to renovate. And keeping tenant-friendly upgrades in mind as you do it — like an in-unit washer and dryer, outdoor space, or pet-friendly features — is a good way to appeal to the tenants you’re trying to find.
Quality tenants are more likely to pay rent on time and take care of your rental, so they’ll hopefully simplify your life as a landlord in the process.
3. Increase Property Value (and Rent)
A third reason you’d renovate your rental property is to increase your property value (and be able to charge more rent). While property value is determined by factors out of your control — like location and popularity of your market — adding upgraded, functional utility to your property can increase its value while making it more appealing to prospective tenants who are willing to pay more.
Increasing your property’s value also better positions you for certain real estate investment strategies, like a cash-out refinance or the “BRRRR” investment method (a buy, rehab, rent, refinance, and repeat strategy). Strategies like these are usually aimed at building up a portfolio of investment properties, but increased property value is going to be beneficial to you in any rental property scenario.
4. Better Compete With Other Rental Properties in Your Area
Finally, it’s a good idea to renovate your property in order to stay competitive in the rental market. If other, similar properties in your area have been renovated or upgraded and your property has not, tenants will likely choose those updated properties over yours.
Take a look at properties in your area to assess what your rental property might be lacking. If every other rental property has an in-unit washer and dryer or updated appliances, you might want to consider upgrading your own rental to stay competitive. Our rent analysis tool will provide you with a rent estimate for your property, as well as rent benchmarks for comparable units and rent trends in the area.
If your reasons for renovating fall into one of these categories, you’re likely on the right track. Keep reading — our Guide to Rental Property Renovations will walk you through how to determine worthwhile renovation costs, as well as some of the areas of your rental property to concentrate on for the best return on investment from renovating.
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As you’re budgeting for renovations on your rental property, there are two essential things to keep in mind: Don’t renovate your rental property the way you’d renovate your own home, and don’t forget about return on investment.
Remember that your rental property is just that — a rental. It’s possible that you’ll wind up with tenants who don’t appreciate the details or quality you’ve invested in, so don’t overdo it. Quality and durability matter, but keep it simple and practical.
You’ll also need to determine the projected return on investment from renovating. You should be able to estimate the increase in rent that will come out of the renovation or be able to calculate the return on the property’s renovated value if you were to sell. If you aren’t able to come up with numbers that make the renovation worthwhile, you might want to reevaluate your plans.
That said, making renovation decisions and pinning down exact numbers can be challenging, and there are a few important factors to consider before you begin. Here are three key considerations to help you get started:
Consideration 1: What to Repair vs. What to Replace in Your Rental Property
If you’re deciding whether to repair or replace, note that there’s a tax incentive for landlords to conduct repairs in their rental properties rather than replacements or renovations. This is because repairs are immediately deductible as an expense, whereas renovations must be amortized over a handful of years.
Here are some tips on common replace-versus-repair decisions that landlords often need to make for their rental properties:
- Hardwood floors: Real hardwood should last a lifetime if it’s well cared for. Even when it’s not, it’s often possible (and cheaper) to refinish rough surfaces or replace specific boards rather than ripping up the whole floor.
- Appliances: Before shelling out for a replacement appliance, search RepairClinic.com for resources to help you diagnose — and fix — the issue yourself.
- Cabinets: The National Kitchen and Bath Association lists cabinets as one of the top costs during renovations. If your cabinets are structurally sound, DIY cosmetic fixes are probably all you need. But, if you do decide to replace rather than repair, keep in mind that stock cabinets range from $80-400 apiece as compared to custom cabinetry, that runs from $500-1500 a cabinet.
- Furnace: The maximum usable life of a furnace is 15-20 years. If yours is on the young side, go the repair route. But if it’s getting close to its end date, go ahead with the upgrade. Make sure you get the right size furnace for the space, though. If it’s too small, it’ll work overtime, costing you more money and possibly shortening its lifespan.
- Energy drains: Older-model air conditioners and toilets could be costing you money simply because they aren’t as efficient as newer models. An energy-efficient A/C can net up to 20% savings in cooling costs over an older model and a low-flow, high-efficiency toilet can result in $2,000 of savings over its lifespan.
- Windows: If your windows have rot or structural damage around their frames, it’s time to replace them. Vinyl windows are known to have better seals than older wooden windows, preventing cold drafts in the winter and saving you money on your heating bill. New windows — or adding insulation to existing windows — can also provide savings over time through increased energy efficiency.
Minor fixture replacements can also make your rental look better for prospective tenants and help eliminate some maintenance issues. Upgrading door handles, faucet handles, outdated light fixtures, or old blinds are inexpensive ways to add some appeal to your property.
Consideration 2: Choosing Rental Property Renovations With the Greatest ROI
There are a handful of reasons you’d want to renovate your rental, but getting some return on your investment is usually one of them. That’s why it’s essential to determine which parts of your rental property will bring in the most return on investment from a renovation.
Prospective homebuyers often cite the kitchen as the most important room in the home, followed by the master bedroom and living room. Among renovation projects, the following were the most affordable AND had the best ROI, according to Remodeling data:
- Midrange bathroom remodel: Cost $20,420 with a ROI of 67%. Note that bigger doesn’t always mean better ROI. An “upscale” bathroom remodel cost more than 3 times the midrange upgrade, but only recouped 60% of its costs.
- Minor kitchen remodel: Cost $11,507 with a ROI of 81%.
- Bathroom accessibility updates: Such renovations are particularly good for markets with older renters interested in aging in place. The average cost of this work in 2019 was $33,374, but owners recouped 63% of the cost on resale.
Consideration 3: Keep Rental Property Renovations Simple
Even modest bathroom and kitchen renovations can have a big impact on your rental prospects and returns. Here are some basic kitchen and bathroom renovation strategies to try according to the needs of your space and your available budget:
- Focus on issues: Not enough counter space? A lack of light over the kitchen stove? Is the bathroom vanity too large for the space? Try using the kitchen and bathroom the way your tenants will to diagnose any issues that affect how they function.
- Stick to surface-level changes: If a space functions well, but is lacking in looks, a few DIY cosmetic changes can work wonders. A fresh coat of paint on the cabinets, trim and walls is an inexpensive way to make a big difference in the feel of a room. BobVila.com recommends sticking to neutrals and using the 60-30-10 ratio for color schemes: 60% of your main color, 30% a complementary color and 10% for an accent color.
- Add storage: Kitchens and bathrooms both come with a lot of stuff you need — just not every day. Adding a kitchen island with storage space beneath, or fitting a slim shelving unit against the wall around the toilet or vanity can add helpful storage that will appeal to renters and encourage tidy living.
- Pick no-fuss finishes: With so many people (with different cleaning habits) moving in and out of your unit, it’s less about choosing the fanciest finishes and more about choosing the low-maintenance materials that will look great longest.
Consider using resin-based or laminate countertops over natural stone for a lower price point and easier care. For flooring, consider porcelain or glazed tiles in smaller sizes. The extra grout surrounding the smaller tiles helps keep floors slip-resistant when wet.
Finally, it’s important to avoid over-renovating your rental. Keep in mind the size and style of the rental property, the neighborhood your property is located in, and what your rental competition is in the area. You don’t want to go overboard on renovations only to find out that factors like these will limit the actual return on your investment.
Renovations can feel like a big undertaking, but even on a budget, you can do a lot to raise the appeal for future tenants and add value to your property. At the end of the day, well-planned renovations can help you increase your rent, reduce maintenance costs, and better position you to compete with other rentals in the area so you can secure quality tenants.
Once you’ve budgeted for renovation costs, we’ll walk you through the next important steps — like choosing the right appliances or picking the appropriate flooring for your rental.
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For property owners, one of the biggest fears you may have is longer than normal vacancy periods. An empty rental property doesn’t earn you income and may attract vandals and pests, meaning it can actually cost you money. But some rental vacancies are inevitable: Every so often, a property needs to be repainted, repaired, or otherwise maintained.
So how often should landlords plan for their properties to sit vacant for optimal long-term performance? We put this question to five professional landlords and property managers to get a sense of what works.
1. Plan Your Vacancies Around the Rental Market
Benjamin Ross is a Realtor, landlord, and investment specialist with MyActiveAgent.com who has owned many rental houses and units in his career. He recommends taking the “heat” of the rental market into account when planning your vacancies.
“If the market is cooler,” he said, “Upgrades [to a property] may be necessary to beat the competition.” Upgrading a property likely means it will have to be empty for at least a few weeks — but if you’re having trouble filling units anyway, upgrades may be an effective way to entice more renters.
“The market will tell you if your cake needs more icing,” Ross said.
On the flip side, of course, he notes that upgrades typically don’t make sense in a hotter market where it’s easier to keep a property filled. But don’t assume that 100% occupancy is a good thing, cautions Jonathan Tran, a real estate investor with AT Home Buyers.
“If you are able to maintain 100% occupancy, this could be a sign your rental is priced too low and you are losing income in that aspect,” he points out. Given that the average renter stays for three years, Tran recommends expecting a rental to be vacant for about two months every three years. “If you’ve been expecting these losses, you can plan to make these major repairs every three years and maintain your property value,” Tran said.
2. Plan to Repaint Every 2 to 3 Years
Tran’s advice aligns with what Domenick Tiziano, a real estate investor and blogger at Accidental Rental, suggests, though he also notes that the “right” amount of vacancy time varies by property size and type.
For example, while he has condos he usually turns over in a couple of days, “Every two to three years, I need to extend that to about a week to repaint everything.”
Because single-family homes tend to rent for longer periods, Tiziano says he bakes in a week or two of vacancy after every renter. Of course, if your building needs more than a fresh coat of paint and some minor repairs, you’ll have to build in a little more time to get it back into top shape.
3. Expect Major Repairs Every 5 to 7 Years
For major repairs, Tiziano estimates that both condos and single-family homes require larger projects, like HVAC replacement or appliance repairs, every five to seven years. Nick Disney, owner of real estate investment firm Sell My San Antonio Home, agrees.
“Rental properties need substantial upgrades and repairs about every five years,” he said. “Minor repairs can be taken care of while the property is being leased, but many large repairs or major upgrades should be done while the property is vacant.”
Tiziano agrees. “The key is to avoid major repairs while a tenant is in place,” he said. “It is too disruptive to them and too difficult to get work done.”
So when should you make time for these bigger projects? Disney suggests planning major renovations to start just after a lease ends and a tenant moves out.
“Almost all renovations can be completed within 30 days,” he said. “You should be able to do the minor repairs and general turnover during that time as well. If you properly plan out and schedule these renovations, you will have much less vacancy time between tenants and you will be able to keep your property up to market standards.”
Take the Long View on Vacancies
By giving you time to ensure that your property is clean, fresh, and in a condition that keeps it competitive with similar properties in the area, scheduling the occasional vacant month can prevent you from having much longer periods of vacancy down the road.
Interested in other tips for boosting ROI by managing vacancies? Check out our guide How to Find (Good) Tenants to Fill Your Vacancies.
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Let’s say you’re a landlord in Chicago — your main goal is to get the highest rent possible for your property, but you’re worried that it is just not technologically up to date. You’ve read local rent reports, you know what dollar amount will earn you a profit, but now you need to make some upgrades.
Perhaps other less desirable-looking apartments have rented for more than your unit, and you are sure it is because those other property owners took a deep smart technology dive.
Let’s look at seven things you can do to bring your apartment up to smart speed in a hurry.
HVAC
A smart thermostat is an absolute must. If you have one of those old, round things that have a spring-loaded mechanism attached to a glass ball that contains highly poisonous mercury, your place is no better than your parents’ old house.
A smart thermostat, on the other hand, will allow your tenant to control the unit’s temperature from their mobile device.
You may even have a programmable thermostat, but if it is outdated, you may need a technical degree just to program it.
If you have lost the manual, you’ll have to download it online, and these things are just not user-friendly as adding a week’s worth of presets can take hours.
With a true smart HVAV thermostat system, you and your tenant can easily set temperatures that include multiple presets. And again, everything can be controlled remotely — even thousands of miles away.
Lighting
This is simple: Get rid of as many incandescent and fluorescent lights as possible and replace those dinosaurs with LEDs. LEDs are becoming cheaper, they last for many, many years, and their hues and brilliance can be controlled by a smart lighting app that is controlled by a mobile device.
Some of the best systems will even interface with outdoor ambient light and adjust indoor lighting accordingly.
Garden
If your apartment contains any green space at all, get a smart gardening app.
This will help avoid those embarrassing situations where your tenant accidentally waters during a thunderstorm because they forgot to adjust the old manual sprinkler system in their unit. Smart apps for the garden can measure soil moisture and help keep water bills low.
Entryway
Tired of charging your tenants for key replacement, or are you constantly worried about unauthorized keys? Put worries to rest with a smart keyless entry system.
The first keyless systems were great, but they had to be manually programmed and presented many of the same issues as did the ancient programmable thermostats.
New smart keyless entryway systems can be set with a mobile app and you can easily move in a new tenant without calling a locksmith as all you’ll have to do is change a code.
Security
Motion detectors were a big thing when they came onto the scene, and smart security apps take it one step further by adding cameras. You and/or your tenant will be able to watch over your property at any time and your mobile device will even alert you when someone comes to the door.
Your smart system will also allow you to take a survey of the premises at any time, and if events like leaks and fires occur, you’ll know immediately.
CO Detector
As you have been told many times, carbon monoxide (CO) is a colorless and odorless gas that can kill you.
CO detectors are a necessity and may even be required by local laws. Get a smart one and you’ll know if CO levels have risen dangerously because your mobile device will alert you.
Automate It
Finally, while a series of individual apps will help add value to your property, you should really consider having everything at your tenant’s fingertips on a pad or computer.
With all of the apps in one place, your apartment will be completely automated, and all of the systems in the entire unit can be easily controlled.
You already know that paint, new fixtures, and nice window treatments will go a long way toward adding to property and subsequent rental value.
Seriously consider the seven tips above as a technologically smart apartment will certainly bring you a higher monthly rent. Don’t let your competitors outpace you — get smart today, and you’ll be on the road to higher rental margins quickly.
And if you want to streamline the entire rental process for you and your tenants, see how Avail can help.
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It’s not a secret that an “updated unit” can draw eyes (and clicks) to a property listing. But which updates are worth the investment? If your goal is to find good tenants and keep them in your unit, there are five that may be worth your money.
Invest in a Professional Cleaning Between Tenants
First, invest in a professional deep clean between tenants, if at all possible. Why? Because, for about $150 per unit, you can transform the look and feel of a space. What’s more, a sparkling-clean unit sets the stage for a great landlord-tenant relationship: right off the bat, you demonstrate that you care about them and about the unit.
Good tenants will appreciate that effort and reciprocate by taking better care of the unit while they’re in it.
Fix Broken Appliances
This should go without saying, but because maintenance issues came up so often in our tenant survey, we figured we’d mention it again here. Broken and malfunctioning appliances are the kind of things that chip away at a renter’s patience. Over time, the irritation of an oven that won’t heat up or a tub that won’t drain can convince even otherwise happy renters to move.
Note that this item is related to communication, too: make sure you respond promptly when tenants report broken appliances and keep them posted on the status of repairs. If they feel like they have some control over the situation (i.e., they say something and it triggers a repair), they’ll be much happier and more likely to renew the lease.
Update Paint and Light Fixtures
Putting on a fresh coat of paint and choosing light fixtures that cast a pleasant glow are relatively inexpensive upgrades, but they can make an apartment feel fresh. Making these upgrades before showing a unit may even make it possible to justify a slight bump in rent.
Update the Flooring
To be clear, laying new floors isn’t cheap. But upgrading to hardwood or tile floors may be worth the investment. Both hardwood and tile are durable and both appeal to higher-income tenants.
Upgrading your space in this way can definitely enable you to charge more in rent and may help you attract the kind of renters who are steadier, more dependable tenants.
Update Kitchen Countertops
As with flooring upgrades, putting in new countertops can be costly, but it can also attract more financially stable tenants. For example, families with young kids are the most likely age group to entertain guests at home, so if you’re looking to rent to that often stable demographic, you’ll make your unit more appealing by ensuring the kitchen and dining areas are places they’d want to share with friends.
Of course, the specific upgrades that make sense for any one landlord (or any one unit) will depend on the details of your situation. But generally speaking, these five tend to yield a good return on investment by helping landlords attract good renters, setting the stage for positive communications between you and your tenants, and raising your building’s property value.
How to Find Good Tenants: Don’t Rush
We started this guide by noting that vacant units are one of the worst things for a landlord’s cash flow. One thing that can be even worse is a terrible tenant — one who doesn’t pay rent, causes damage, or even forces you to go to court over one disagreement or another.
So while all of these tips are important to help you find good tenants and fill your vacancies, keep in mind that a vacant unit is better than a unit occupied by a tenant you’re not sure about.
Walbye, the landlord from Fort Collins, put it this way: “Even in the worst rental times, it pays to be patient and wait for a good tenant, even if it costs you a month’s rent.”
We couldn’t agree more. For more insight on how to fill your vacant units with excellent renters, check out our guide to finding tenants you’ll love. Once you’re ready to take the next step, screen potential tenants and create a digital lease on Avail.
Happy Renting!
Previous Chapters In this Guide
- Chapter 1: The Importance of Maintaining Your Rental Property
- Chapter 2: Advertise Your Rental Property The Right Way
- Chapter 3: Screening for Good Tenants: Lease Renewal Factors
- Chapter 4: Communication With Your Tenants is Key
- Chapter 5: Perks to Allowing Pets in Your Rental Property
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When done the right way, the kitchen is the heart of the home. Eighty percent of house hunters said the kitchen was the most important room in a house, so before you jump into a remodel or start upgrading, it’s worth knowing a thing or two about appliances.
Cooktops and ranges are often the centerpiece of any kitchen, but many homeowners don’t know which one they need — or what the differences between them are. Sizing, functions and configurations vary between cooktops and ranges, so if you’re not sure what to look for in your rental, here’s what you should know.
Cooktop vs. Range
Let’s go over the basics. A range is the appliance that has both a stovetop and an oven in a single unit. It’s the most common option in kitchens, granted there’s enough space for one — the standard width of a range is 30 inches wide. A range will usually fit into a cabinet opening, and they take up less room than a cooktop and separate wall oven, making them ideal for the typical rental-kitchen layout. Plus, all your cooking functions are in one place.
A cooktop is the burner that sits on a countertop and isn’t attached to an oven. Because it’s a stand-alone appliance, it offers more flexibility in placement. Cooktops are great for very small kitchens that don’t have room for an oven, or larger kitchens with stand-alone wall ovens. A benefit of a cooktop is that the cabinet space underneath is still available for storage.
If you’re investing in your rental kitchen, it’s worth taking a look at pricing. Ranges tend to be more affordable than a cooktop/oven combo, but some higher-end ranges are the most expensive. According to CNET, simpler, bare-bones options start around $500, while customizable ranges can be more than $10,000. The upfront cost of new appliances should ultimately factor into the rent you charge, and so should the cost of repair.
What’s the Best Kind of Cooktop?
Each kind of cooktop has its pros and cons. Here’s the differences between them:
Gas burners: Gas burners cook food using a flame. Home and professional cooks often prefer gas stovetops, because they provide instant heat and instant control of that heat through the flame.
Electric cooktops: These cooktops come in either smooth glass-ceramic or electric coils. Electric coil stoves are the most common in rentals because they are the cheapest option and have lower maintenance costs. Glass-ceramic cooktops are easier to clean, but are prone to scratches, and some cookware isn’t safe to use on their surfaces.
Induction cooktops: These burners use heat from electromagnetic energy. While they’re safer than gas or electric burners, they require specific cookware and are more costly than their gas and electric counterparts, according to CNET. On the plus side, they’re energy-efficient, because there’s no wasted heat energy.
Choosing the Right Range for Your Kitchen
Per CNET’s cooking results, electric ovens cook more evenly than gas ovens. Electric ovens usually also cost less than gas ovens, and there’s no need to install a costly gas line if you don’t already have one. On the other hand, temperature adjustment and cooking consistency is better in a gas oven.
If you want to combine the power of both, dual fuel ranges use gas for the stovetop and electric for the oven. The downside of dual ranges is that they cost more than their single-power-source peers.
If you have a sizable kitchen with plenty of space, you might consider a double oven. Double ovens aren’t cheap (they start at $1,200, according to Consumer Reports), but they offer two ovens — usually a larger oven below and a smaller oven on top. Double ovens are great when cooking for large groups or cooking multiple dishes at different temperatures.
Quality Appliances Attract Top Tenants
Much like a high-end kitchen attracts homebuyers, an upgraded kitchen can lure prospective tenants. For landlords looking for new tenants, make sure you highlight your kitchen upgrades in your rental unit advertising as well as neighborhood amenities like parks, transit, and restaurants.
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Just like upgrading appliances add value for home sales, it does the same for attracting quality tenants and commanding higher rents. One landlord told Avail that buying an $800 refrigerator at Home Depot allowed him to increase his rent by $50 each month.
While investing in your property can bring in more income, that investment doesn’t always come cheap. New appliances can cost between $350 and $8,000, with refrigerators on the higher end of that range. So before you upgrade your appliances, know which ones are the best for your rental property.
Gas Stove vs. Electric Stove: Which Is Better for Your Rental?
Beyond the cost of the stove itself, it’s important for landlords to consider the long-term costs and risks associated with both kinds of stoves. Per Consumer Reports, here are three areas to compare between electric and gas stoves:
- Price: Gas appliances cost more upfront, but natural gas is cheaper in the long run. It’s costly to convert from a gas to an electric stove or vice versa.
- Safety: Both gas and electric stoves come with risks. While gas stoves come with carbon monoxide poisoning risks, electric stoves have slight electrocution and fire risk if they’re not installed or maintained correctly.
- Range: Everyday cooks may not notice the difference between electric and gas stoves, but bakers will like electric and chefs prefer gas.
Note that your hookup might also dictate what kind of stove you choose. If you want a gas stove, you’ll need a gas line running into your house. On the other hand, electric stoves simply need electricity (with an outlet providing the right voltage). As noted above, converting from one hookup to another can be costly and potentially not worth the investment for your rental property.
If you’re getting more specific and trying to decide between a cooktop and a range, learn more about the differences and which is best for your rental property’s kitchen.
Rental Property Refrigerator Tips
White refrigerators are just fine, but renters like to see stainless steel refrigerators in a rental unit. If you’re going to invest in a new refrigerator, make sure that it fits the dimensions of the kitchen and that both the freezer and the main compartment have enough room to swing open.
Faux stainless steel refrigerators might be more stain-resistant than traditional stainless steel refrigerators, but they may not match the other stainless steel appliances — something to keep in mind as you evaluate stainless steel options.
Ice makers are another factor to consider as you make a decision about a refrigerator. Ice makers are convenient (and some tenants might ask for one), but an ice maker may not be worth the hassle. Ice maker hookups can disconnect and leak, so be prepared for the possibility of additional maintenance if you opt for a fridge with an ice maker.
Dishwasher Suggestions for Your Rental Property
Installing a dishwasher adds value to your rental property because it’s a useful amenity that prospective tenants want to have. But how do you know which dishwasher is right for your rental? Here are three things to consider when buying a dishwasher:
1. Capacity: In a small kitchen or studio, a compact dishwasher should suffice. But if there’s space or multiple tenants, a standard-size dishwasher is best.
2. Energy: Look for a dishwasher that has an Energy Star symbol. If you include electricity in the rent, you’ll save money. If not, your tenants will.
3. Garbage disposal: Some dishwashers have self-cleaning filters for removing food residue during the cleaning cycle, but others require manual cleaning. Either way, this is important to know for long-term maintenance of the dishwasher.
What to Know Before Buying a Washer and Dryer for Your Rental Property
Tenants will greatly appreciate having a washer and dryer in the building or in the unit itself. If your rental competition in the area is offering a washer and dryer, you’d be smart to do the same. If you don’t have a washer and dryer for your unit but have the hookup available, you can add a clause within your lease agreement that allows renters to install their own appliances and outlines your repair, noise and flooding policies.
Or you can purchase a washer and dryer yourself, with some top-end units costing up to $1,600, according to Consumer Reports. Keep in mind that having laundry in your unit may give you the ability to increase the rent, but also comes with the risk of unexpected repairs.
These are three things to consider before buying a washer and dryer for your rental property:
- Machine Type: The available space you have in your rental property will likely dictate the style of washer and dryer you can provide. If you have a designated laundry room or a common area, you’ll probably want to buy larger, side-by-side top-loading washer and dryer units. If you have limited space, you might instead consider stackable, front-loading washer and dryer units, or a single combo unit that both washes and dries clothing. Front-loading washing machines usually use less water and energy, but top-loaders typically require less maintenance. You’ll want to fully evaluate the pros and cons of each machine type to figure out which is best for your rental.
- Modifications: Pay attention to any modifications you might need to make to accommodate a washer and dryer in your rental unit. Do you already have the necessary hookups for the machine you’ve chosen? When considering electric versus gas powered dryers, it’s recommended that you stick to the machine that you already have the hookup for to avoid added expenses.
- Energy savings: Look for machines that have been given the Energy Star symbol. According to Energy Star, Energy Star-certified washing machines use 25% less energy and 33% less water, and certified dryers use 20% less energy.
Tax Incentives to Upgrade Appliances in Your Rental Property
In addition to adding value to your rental, your appliance upgrades may be tax-deductible. As of 2018, some landlords can deduct appliances under Section 179 of the U.S. tax law. It’s important to note that there are specific requirements that need to be met for a rental property to qualify for Section 179 expensing — but if you do meet the requirements, you may be able to deduct your new appliances in a single year rather than waiting for their value to depreciate over time.
Outlining Appliance Maintenance in Your Lease
It’s important to outline who is responsible for maintenance on appliances in your rental property. A landlord is usually responsible for any maintenance and repairs, but there are some cases where a tenant will be required to cover the cost instead. If you do plan on placing any appliance maintenance responsibilities on a tenant, make sure you clearly outline those expectations in your lease — your tenants need to be aware of any maintenance they are responsible for.
If you do plan on designating maintenance tasks for tenants, use a customizable lease template so you can clearly outline expectations and avoid any future conflict over who is responsible for repairs.
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