Maintenance costs have been rising, and even finding a licensed and insured vendor to do the work you need is not always easy, especially if you do not already have these relationships in place with reliable professionals. 

This means that most rental property owners have to be extra strategic when it comes to completing work and renovations at their investment properties. 

Keeping a rental home well-maintained is non-negotiable. You’re legally required to provide a property that’s safe and habitable. You need to respond to routine and emergency maintenance, too, otherwise, you’ll compromise the condition of your property. 

But, some repairs and upgrades can wait. Others are urgent. How do you decide? 

We’re looking at how to make smart investments in your Memphis rental property. You need to analyze and understand the difference between needed repairs and recommended repairs, especially when it comes to managing the value of your property. 

Here’s how it looks to us, a professional Memphis property management team. 

Choosing Renovations and Repairs that Will Raise Rents

When it comes to setting a rent price, you’re comparing your property against the others on the market. You’ll price your own home a little higher or a little lower depending on what you have to offer. 

This is why certain upgrades make sense and others do not. If your property looks better and offers a better look and feel, you’ll benefit. Your property with new flooring will earn more than a neighboring home with old carpet, for example. These updates and improvements will help your rental home stand out. 

However, if no other rental homes in your area have granite counters, there’s no reason for you to spend money on those granite counters. 

Another benefit to making the right repairs and improvements is the increase in property value. You’ll likely sell your investment property one day. Maybe that’s still five or 10 years away, but when you keep your property up to date, the sales price of your home goes up, too.  

Upgrades don’t have to be expensive. They can actually be cost-effective, and when you know which renovations really matter, you’ll find you’re able to earn back what you spend relatively quickly.  

Preventative Maintenance is an Opportunity 

Always make the upgrades and improvements when you need to make a repair anyway.

For example, if a refrigerator has broken down twice in the last four months, why repair it again? Replace that refrigerator instead.

There’s no danger of deferred and unreported repair issues piling up when you’re constantly improving your property. Making routine upgrades or at least assessing your home for places where you can make minor or cosmetic improvements will ensure you’re always keeping an eye on the most expensive systems, such as your HVAC and roof.

Planning for the Right Property Repairs and Renovations 

Before you jump into remodeling, you need to put together a plan. Here’s what you need to consider:

• When should you complete these upgrades?
• How much are you willing to spend on the projects?
• What kind of impact with these renovations have on your ROI?

In terms of timing, most owners find it easier to work with an empty property. You might want to make the chosen renovations during a turnover period when you’re preparing to re-rent the home to new tenants. Or, if you’re negotiating a lease renewal, your existing tenants may ask for a new appliance or a freshly painted room.  

You’ll need a budget. How much are you willing to spend on improving your rental property? 

This is where you need to analyze your projected spend against what you’ll earn. What is really necessary to attract and keep good tenants? What is extra?

Deciding how much to spend can be tricky and there isn’t always an easy number to use when you’re budgeting. You don’t want to overspend. You’re not renovating your own home, so the indoor hot tub and the bamboo floors probably won’t be necessary. You’re thinking about the return you earn on the investment you make. 

Budgeting depends on the renovations you decide to make. Think about repairs versus replacements. What are tenants in your market really looking for? What has your home seemed to lack the last few times you listed it on the rental market? 

Keep renovations simple and choose good starting points. Work with what you already have, and then look for those opportunities that are affordable and easy to complete in a short amount of time. 

Functional vs. Cosmetic Renovations 

Cosmetics may seem less important when you’re deciding what needs your immediate attention. However, you must remember that these cosmetic upgrades and renovations are usually more cost-effective than major repairs and rehabs. Tile backsplash in a kitchen is a much easier repair and cheaper expense than replacing all the counters. 

These updates are also easy to notice. Something as simple as new drawer pulls can increase the value and earning potential of your rental home. 

Start with the kitchen, where you can upgrade without a total rehab. 

• Put in a new faucet in the kitchen sink. 
• You can install track lighting that’s bright and also easier on energy bills. 
• Try new knobs and pulls on cabinets and drawers. 

It’s about aesthetics. With these types of updates, the kitchen in your rental property will stand out in the market. Spruce things up this way in the bathroom, too. Consider a fresh new faucet, lighting that can be adjusted, and a vanity or sink that comes with extra storage. 

Think about the first impression that tenants have when they walk up to your property. Is the home welcoming? Is it attractive? 

The outside of the home is immediately noticeable, so you want to pay attention to the landscaping. Tenants will be attracted to a pretty, low-maintenance outdoor space that won’t require a lot of work from them. 

Make some simple upgrades, like fresh paint on the front door. Power-wash the exterior and install some planters or succulents. All of these small details will increase your value by making your property stand out and by attracting the best tenants who are looking for a Memphis rental home. 

These are our general recommendations as Memphis property managers. We can take a look at your home specifically, and help you decide where upgrades and repairs can have the biggest impact. Contact us at RiverTown Realty.