Upgrades to Maximize Your Rental Income | Guide for Los Angeles Property Owners
Owning rental property in Los Angeles means you’ll renovate that investment at some point in your real estate career. These can often feel like simple line items on your expense report, but if you’re strategic about what and when you renovate your property, there will be more to earn and less to lose.
Renovate for profit, and focus on cost-effective upgrades and updates that will do two things:
Increase your rental value
Attract high quality tenants
The best renovations will increase your units’ worth in relation to the amount you spend on them. According to investment data, property owners across the United States who spend $2,500 to $8,000 on rental property renovations end up earning 10 to 30 percent more rent.
Here are some of the things you’ll want to focus on to achieve similar results.
Paint the Interior of Your Rental Property
Fresh paint is always more attractive than paint that’s chipped, faded, or peeling. Instead of simply touching up a wall or a scuff mark, paint the entire unit. This will make everything look new and modern, and you won’t have to spend too much money on paint and supplies.
Upgrade Your Floors: Hard Surface vs. Carpet
A lot of investors favor cleaning carpets between every tenant. You might replace those carpets every five years or so. We recommend you pull out the carpets entirely and install hard surface flooring.
This upgrade provides several benefits:
It looks better. Hardwood floors or vinyl laminate or tile have a cleaner, more modern appearance.
It’s better for prospective tenants who have allergies or pets. There aren’t any fibers to trap dog hair and dust.
It’s easier for tenants to clean and maintain.
You’ll get a longer lifespan out of hard surface flooring than you will from carpet, so your replacement costs go down per unit.
New, hard surface flooring like laminate or tile can earn you up to $100 more in rent per month, depending on the size of your property and the materials you choose. While cheap carpet is always tempting and seems easy, do a little research into the benefits of upgrading your floors. Consider hardwood, tile, vinyl, laminate concrete and any of the other engineered options that are out there.
Interior and Exterior Lighting
Lighting does not cost a lot, but it delivers great returns. You likely will not have to re-wire all the electricity in your property. Instead, work with what you currently have and focus on updating the fixtures and the energy efficiency. Using LED fixtures will likely reduce electric bills, which is good for you and your tenant.
Exterior lighting helps your residents feel secure, and it protects your investment property. A well-lit property is less likely to be victimized than a dark building or home. If you’re renting out units in a multi-family building, make sure the parking area is well-lit as well as all the common areas. In a single-family home, update your exterior lighting to include timers and motion lights. Tenants will appreciate the extra security.
Kitchens and Bathrooms Matter to Los Angeles Tenants
Tenants are going to spend most of their time in their kitchens and their bathrooms. These are the spaces that they’ll really inspect before they decide to rent a home. When you’re making renovations to your rental units, focus on the kitchen.
Look at your appliances and if they’re old or worn, replace them. Consider stainless appliances and energy-efficient refrigerators. Tenants will pay more rent for an upgraded kitchen. Evaluate your counters and your cabinets, as well as the sinks and the hardware.
Bathrooms are important, too. They should look clean and modern. Remove any old, worn, or stained showers and replace flooring that’s peeling or scratched. Even installing new hardware like faucets and drawer knobs can give the space a huge and value-added makeover. Bathrooms are small spaces designed more for functionality than aesthetics. But, no tenant wants to take a shower in a stained and worn bathtub. Tile is great for a bathroom upgrade as well.
These are the renovations that will be most beneficial to you as an investor. You won’t have to invest a lot of money at the front end, and the earnings will be well worth any expense.
If you’d like to talk more about what we can do to help you earn more on your Los Angeles rental properties, contact our team at MGMT Group, Inc.