Real estate investing is on the rise, according to Redfin, with 18% of the homes purchased in the third quarter of 2021 being bought as investments, rather than as permanent residences. Since the primary purpose of an investment property is to generate profit, either through rental income or increased value as part of a flip, it’s easier to do that when you keep added expenses and renovations to a minimum.
However, there are some upgrades you can make that won’t cost an arm and a leg and that will increase your property value almost immediately.
Some of the best low-cost upgrades include:
One of the easiest and most economical ways to spruce up an investment is to remove all the grease, grime, and dust that may have built up over time.
Wash walls, cabinets, windows, and floors before deciding whether you really need to replace anything. What may have looked unsalvageable at first glance may turn out to be worth keeping once it’s spic-and-span.
This is a task you can do yourself, or pay a cleaning service to tackle for a few hundred dollars, depending on how large the space is.
Interior painting is one of the cheapest ways to spruce up a property, with paint costs averaging $1.50 to $3.50/square foot for an interior room, according to Forbes. That means a small room could cost as little as $50 or less.
When painting, stick with neutral colors, like white, beige, or gray to appeal to the broadest cross-section of potential renters.
Although hardwood floors are appealing to renters, unless there are existing hardwoods in your property that can easily be refinished, a better choice today is vinyl plank flooring. This flooring looks like hardwood but it is much more durable and economical.
Where true hardwood floors will become scuffed and scratched through normal wear, and potentially damaged if pets are living there, vinyl plank flooring holds up better, while being relatively inexpensive to install. Depending on the design, you might pay as little as $2/square foot for flooring that looks like wood.
Kitchens and baths are two of the most important rooms in a home, experts have long said, so assess how you might update the kitchen without breaking the bank. Swapping out appliances can be done on the cheap by purchasing second-hand units at your local ReStore, which is run by Habitat for Humanity, and which sells secondhand appliances, furniture, and other home improvement items.
If that’s too big a project, adding a kitchen backsplash is another potential project. HomeAdvisor reports that an average backsplash job costs around $1,000. Peel-and-stick backsplash tiles can be even less expensive, and easy to swap out later, too.
Another replacement that can pay off big is cabinet and drawer pulls. Removing and replacing outdated cabinet hardware can completely update the look and feel of a kitchen, for as little as $100.
Depending on the type of light fixtures the home currently has, consider replacing outdated lighting with recessed lighting. Individual can lights can cost between $125 and $300 each, plus installation, and can dramatically transform a whole room with their addition.
A Washer and Dryer Unit
Many renters report they would be willing to pay extra for access to a free washer and dryer. Investors on BiggerPockets suggest that an in-unit washer and dryer should be worth at least $50 extra per month, or $600/year. With a stackable unit costing around $1,400, it will be paid off in little more than two years at that rate, not to mention increasing the desirability of the property immediately.
To make a great first impression, spend a little money to enhance the appearance of the front of your property. This can be as easy as trimming back overgrown trees and shrubs, to planting colorful flowers. Putting down some dark mulch to make the greenery pop is relatively inexpensive and conveys that the property owner cares about the place.
With porch pirates becoming more problematic, adding a way for tenants to monitor who’s approaching their home can be a big plus. Fortunately, the cost of security systems has dropped to as little as $200. You can even buy security cameras and install them yourself around the property, with smartphone alerts.
Making your property look its best inside and out can both attract tenants and hold onto them long-term if that’s your goal. However, to ensure that your investment is profitable, be sure not to over-improve your place to the point that future rents will never pay back what you’ve spent. When in doubt, stick with low-cost, high-impact improvements.
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