Is there such a thing as too much rehab for your Atlanta rental property? The simple answer is yes, there is.
It's important for a rental to attract quality tenants. However, the wrong upgrades (or too much rehab) can lower your returns and make it challenging to find good residents willing to pay a high price for your rental home. What is "too much" rehab? Our Atlanta property management experts have three insights for a property owner to consider!
1. How Rental Property Rehab Projects Affect the Monthly Rental Prices
The right types of upgrades can help investors justify a rent increase. However, too much of an increase can leave your property empty because the price is too high for the market.
To completely renovate your property before renting it out, you should prepare to spend a significant amount of money. While, in some cases, a property might need extensive updates to stay competitive, it's critical for real estate investors not to make updates that create a home that's undesirable for their target tenants because it's too fancy and expensive compared to similar properties in the area.
One of the most common reasons why renters move is because the rent becomes unaffordable to them. Even though tenants appreciate upgrades to their homes that make their lives easier, they aren't often willing to overpay to enjoy them. So, trying to pass on the considerable renovation costs to tenants through high rental rates could backfire on property owners.
When considering upgrades, work with an Atlanta property management company to consider the local rental rates and compare them to what you would have to charge to recover your money. Property managers can tell you that fancy rental properties don't always lead to more rent or long-term residents. Most renters want affordable yet decent housing.
If your Atlanta rental property cannot attract good renters—despite upgrades—it will stay vacant and lose money for you.
2. The Types of Rehab Projects That Bring the Best ROI
When considering your next round of rehab projects, which ones bring in the best ROI? Some projects will add more value to your Atlanta property than others. If you have a limited budget, create a list of potential updates and consult with property management experts to determine the best upgrades that maximize your budget and generate the best returns.
With a goal to complete projects that will significantly increase your home's value, you can justify a reasonable rent increase to stay competitive and generate more revenue. As your cash flow increases, plan another round of updates that make good financial sense!
Start With High-Probability Wins
Your Atlanta property manager can help you target upgrades that can help you find better renters faster (and reduce vacancy times) and boost your rental rate. Start by prioritizing curb appeal! Beautifying the exterior of your property helps make a good first impression. Improving curb appeal can include repainting your exterior walls or installing wall treatments, decorating the yard, fixing roof issues, installing a statement entry door, and repairing the patio or deck. Some of these issues may be costly money, but they often bring better returns on your investment.
Other rehab projects which will bring high ROI include:
- Installation or replacement of garage doors
- Remodeling the kitchen by updating features such as cabinets, appliances, and the floor
- Replacing existing windows with energy-saving ones
- Installing a universal bathroom that would serve the needs of renters with disabilities
In an era where digital photographs can help boost the interest among potential renters, improving curb appeal could help you reduce vacancy rates by enhancing the look of your rental in online listing photos and marketing efforts.
3. The Advice of an Atlanta Property Management Expert
Before you start to spend your hard-earned money on rehab, consult a property management professional.
Atlanta property management companies understand the nuances of the local rental property market. They know what tenants want and find attractive. They also know which rehab projects don't impress renters and can lead to revenue loss for investors. Their expertise and experience will enable you to make correct decisions concerning which rehab projects to tackle first so that you can get the rental property occupied quickly—and at the best monthly rental rate.
Choose the Right Atlanta Property Management Company (and Renovations)!
Working with the right property management company in Atlanta, GA, helps a property owner make smart decisions about profitable upgrades. Property managers also have access to a trusted network of quality contractors to deliver quality rehab work at the best prices.
When you're ready to make beneficial rental property updates, Renters Warehouse Atlanta is here to help! We have the experience to help property owners analyze the market, choose the best updates, and improve returns. Whether you have one property or several, reach out to learn more about how we can help maximize revenue with our full-service property management!
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