Updating an investment property is generally a sound strategy—if it’s done the right way.
How do you know which upgrades are worth the hassle and expense—and which aren’t?
To make the most of your remodeling, it pays to keep three types of projects in mind:
1. The Basics
The things that buyers expect when they purchase a home. This includes a roof that doesn’t leak, functioning gutters and downspouts, a dry basement, a reliable furnace, solid floors, walls that are in good repair, and retaining walls that work.
This doesn’t mean you have to upgrade all of it. You can focus on regular maintenance and smaller, cheaper improvements that keep everything in good working order.
2. Curb Appeal
Items that add curb appeal help the property to look good. Curb appeal items include a well-manicured lawn, low-cost landscaping, fresh paint inside and out (at least the front door), cleaned carpets, and new fixtures (even redoing the address numbers). You can do these projects yourself to save money and time.
3. Value-Added
The National Association of Realtors (NAR) cites new siding, kitchen renovations (new countertops and state-of-the-art appliances), and new windows as projects with some of the highest return on investment, often recouping 80% or more of their costs during resale. Upgraded bathrooms and energy-saving improvements also offer a lot of bang for the buck.
Elaborate custom upgrades may appeal more to you than to potential buyers. It’s best to keep renovations small, neutral in looks, and centered on improving the functionality of your home.
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