Maybe you’ve just moved into a Houston home and you’re not quite satisfied with the way it looks and feels. Maybe you’re invested in a Houston rental property and you’re looking for ways to make it stand out from competing properties. Or maybe you’ve lived in Houston for many years and you’re simply interested in a change.
In any of these scenarios, you might be considering a renovation to your Houston property. Renovations can be expensive and time consuming, but they can also be valuable changes to your property. So how can you tell which renovations are valuable, and which renovations to avoid?
What Makes a Property Renovation Valuable?
Let’s start with a clarification of terms. What is it that makes a property renovation “valuable?”
There are several variables to keep in mind here:
- Low costs. One of the biggest factors for success is your renovation project’s ROI, or return on investment. In other words, how much value are you getting compared to how much you have to spend on the project? For the most part, lower-cost projects have an advantage here, since they don’t have as much of an impact on your profitability.
- Home value return. Next, you’ll need to think about the potential increase in home value you’ll see as a result of the renovation. In some cases, you’ll see an increase in your property value close to what you spent on the upgrade, meaning you’ll make your money back almost completely when it’s time to sell the property. However, not all renovations come with an attractive return in this area.
- Tenant appeal. Some renovations are valuable because they make a property more appealing to prospective tenants. A new kitchen, with all-new appliances, will almost always look more attractive to a tenant than an old kitchen with obsolete hardware. With the right renovation, you can cut down on tenant turnover and get new tenants in faster.
- Cost savings. If you’re living in the property, you may benefit from cost savings as a result of your renovations. For example, improvements that increase your home’s energy efficiency can save you money on your utility bills for years to come.
- Aesthetics and personal appeal. Don’t discount the aesthetic appeal that your renovations can have to you, personally. Walking into a beautiful, modern kitchen can have a powerful psychological impact on you every day.
The Most Valuable Renovations
With those variables in mind, these are some of the most valuable property renovations you can undertake:
- Kitchen upgrades. A major kitchen remodeling project will increase your home’s value by around 54 percent of the cost of the renovation. So if you spend $20,000 upgrading the kitchen, you’ll see an increase in your home value of about $10,800. On top of that, a better-looking kitchen will attract better tenants, keep your current tenants happier, and significantly improve your quality of life. Over a decade or two, the kitchen will practically pay for itself. Just make sure you’re getting a good deal and having quality work done.
- Bathroom upgrades. Bathrooms are very similar to kitchens; like kitchens, they can become out-of-date in a decade or two, and they’re one of most important rooms for forming a good impression with tenants and guests. Upgrading a bathroom has a similarly high ROI, and can instantly make your home seem more inviting and beautiful. As an added bonus, upgrading your plumbing fixtures can reduce the amount of water you use in some cases.
- Curb appeal improvements. Almost any kind of upgrade you make that boosts the curb appeal of the property can be valuable. For example, you can replace damaged or deteriorating siding, you can paint the exterior of the house, or you can invest in better landscaping. If the home ultimately looks better from the outside, it’s probably worth the investment.
- High efficiency windows. If your home has older windows, upgrading to newer models can be a massive improvement. Not only will your home value increase, but you’ll also make the home more comfortable and decrease what you’re spending on utilities. Overall, it offers one of the highest ROIs on this list.
- Better roofing. If a roof is damaged or faulty in some way, it can result in leaks that damage your home even further. That’s why investing in a higher-quality, newer roof is almost always worth the investment.
- HVAC upgrades. You can also make a property instantly more valuable by investing in its HVAC system. Upgrading your old air conditioner or furnace, or even cleaning and improving your ventilation system can make a massive difference in how comfortable your property is.
- Flooring. The age and appearance of your floors will make a powerful first impression on tenants and guests. Consider upgrading your floors to a higher-quality wood, or replacing your old carpet with something newer.
- Wall repairs and painting. Though not technically a renovation in the truest sense of the word, repairing and painting your walls can make your Houston home seem newer and more valuable. And it costs next to nothing to execute this strategy.
The Importance of Ongoing Maintenance
While not a renovation, it’s also worth noting the value of ongoing maintenance. Conducting simple fixes, routine inspections, and basic cleaning can all keep your property in fully functioning condition—and catch small problems before they become worse. Ultimately, it doesn’t take much time or money to conduct this routine maintenance, but it has the power to save you thousands of dollars in the long run—making it arguably the most cost-effective strategy you can implement.
Are you thinking about upgrading a rental property in the Houston area? Or are you unsure what you want to do with your existing property? It’s often helpful to get advice and insight from a property management company before making a final decision. Reach out to Green Residential today, and learn more about how we can help you improve your property in a way that results in the highest possible return on investment.