To renovate or not to renovate, that is the question. On one hand, an upgraded and aesthetically appealing home can entice better tenants to choose your property and hence bring in higher rent, but on the other, the returns you earn should justify the high cost of remodeling and the loss of rent you incur in the meantime.
In this article, we shall discuss the pros and cons of renovating your Arcadia rental unit, so you can make a decision that is profitable for you.
Pros of Renovating Your Arcadia Rental Unit
There are various advantages of renovating your rental property. Renovations can help:
- Minimize The Operating Costs of Your Arcadia Property Over the Long Term
Think about how much money you pour into routine property maintenance like maintaining the curb appeal, landscaping, cleaning. Broken heaters or HVAC systems and non-functional appliances burn an even bigger hole in your pocket. When renovating the home, you can eliminate recurrent problems like leaky roofs, pipes, loose knobs, or broken air conditioning. In addition, if you install smart and efficient new appliances, you get them at a warranty, saving you repair or replacement costs in the long run.
- Increase The Market Value of Your Arcadia Rental
Renovations enhance the aesthetic appeal of your home. This impresses prospective applicants and adds to the value of your unit. The new amenities can make your rental home stand out from the rest and also let you charge a higher rent price and stay ahead of the competition. You can also sell such a property at a higher price.
- Attract Well-Qualified and Long-Term Tenants
If the property is in demand and the rent is reasonably high, you get a better pool of tenants who have the financial readiness to pay rent on time and the ability to cover the security deposit. This can contribute to increasing your ROI for the property. In addition, tenants are happy to settle into a home that has a modern and upgraded feel, which helps you retain them for a longer term. Reduced tenant turnover and good rent are both positives for your Arcadia property.
- Improve the ROI with Additions
Renovations can enhance your ROI in more than one way. Remodeling your house can unlock additional potential sources of revenue. For instance, you can convert the basement into a bedroom or a kid’s room and charge higher rent due to the added usability of the space.
The Downsides of Renovating Your Arcadia Rental
Like the proverbial other side of the coin, there are some downsides of renovating your Arcadia property as well, that you must consider before renovating.
- Interrupted Cash Flow
One of the major disadvantages is the loss of rental income during the renovation period since you cannot place tenants while the work is in progress. Your property might stay vacant even after renovation until you start advertising and find quality tenants.
- You May Have to Charge Excessively High Rent for Breaking Even
Over-customizing the rental during the remodeling, like adding wallpapers in every room, combining two bedrooms to make one large bedroom, or adding a water feature will only drive up your renovation costs which will need you to charge excessive rent just to break even. Naturally, too high rent will not be commonly affordable, making it difficult for you to get the house rented. Although renters prefer new and upgraded units, they also like it to be affordable and easy-to-maintain.
After considering the pros and cons of renovations, it is clear that you need to know what it suitable for your property to maximize your turnover within minimum cost. It can be beneficial to consult an Arcadia property management expert here, to know if renovation is the best way forward to increase the ROI of your Arcadia property.
Connect with a reputed property management company like ZenPro Property Management. With over 18 years of experience, our professionals can help you make the right decisions about your investment.
For more information, contact us at ZenPro Property Management.