Experienced property investors recommend allocating resources for property renovation on the main property features based on the following percentages:
- Kitchen: 30%
- Bathroom: 20%
- Exterior: 20%
- General Improvements/Other: 30%
After you determine the parts of your property that fall under these percentages, factor in the total worth of the property and get a percentage of it. For example, if you have a $40,000 property renovation budget based on 10% of a $400,000 property value, it would appear like this:
- Kitchen: $12,000
- Bathroom: $8,000
- Exterior: $8,000
- General Improvements/Other: $12,000
Remember that every adjustment has to factor in your target market and what will maximize value for your eventual Simi Valley residents. List each room and feature of your property and utilize your allocated property renovation budget to find what needs improvement the most (you do not need to use the whole budget).
Some property investors might want to maximize their property renovation budget by redoing the whole kitchen or bathroom; however, it is important to keep costs as low as possible and realize what needs the most work. For example, you could keep the main kitchen body and only replace the floors, sink and faucet, add new appliances, and paint the cabinet doors or add new handles. Bathrooms can normally stay the same with their walls and layout, but you could put in a new shower head or heads, toilet, or vanity based on your vision for a more clean and modern aesthetic. If there are items from your property that you do not wish to keep, consider utilizing a second-hand market by selling them to have more funds for adding new things. Alternatively, to cover costs, some Simi Valley investors might buy from the second-hand market or a community online classifieds section to find lower cost things for kitchens, bathtubs, windows, and doors.
Generally, a full renovation with your Simi Valley property renovation budget will most likely always add more value. However, overcapitalizing can be a factor, especially when rental values can alter depending on the market. As such, ensure that your budget matches your goals and that you do not perform expensive renovations that are not needed to attract higher rent.
In defining the most important items to focus on with your property renovation budget, we have found that these elements tend to attract a higher rent value:
- Updating the kitchen and bathroom to be more modern
- Adding blinds/window dressings and floor coverings
- Putting privacy features
- Outdoor living areas and fencing
- Ease of access to rooms
- Natural lighting in the home
The most important factor in renting to Simi Valley residents is to have the best presentation that you can to make a positive impression with your prospective residents that would last even after they decide to reside in your property. Additionally, prior to contacting you, potential residents will often drive by the property itself to see its condition. If they are impressed, then they will contact you for more information. If not, they may move on to the next rental property. As such, curb appeal can help attract and retain quality residents. A successfully planned property renovation budget will result in careful consideration of all the costs necessary to allocate the right resources and time to what matters most to your future residents.
Would you like a free assessment of your rental property from Real Property Management Ventura County? Contact us online or call us at 805-387-3682 today for more information.