Avoid These 6 Rental Renovation Mistakes with Your SFR Properties

Home renovations will always be part of being a single-family rental (SFR) owner/operator. However, the renovations you decide to tackle will vary based on your long-term plan for your SFR properties and how long you plan to hold them before selling. As you plan your renovations for 2024 and beyond, watch out for these rental renovation mistakes we frequently see in the field.For example, if you’re planning to hold a property for a short time, you may choose to spend more because of the potential to get a quicker return, or if you’re planning to flip it you can bake renovation costs into the sale price. If you plan to hold the home for a 10-year cycle, you may want to invest in renovations upfront so you don’t have excess maintenance issues (and costs) during that decade. For a five-year holding pattern, you’ll likely choose to be more conservative with renovations to maximize your investment for the medium term.
  
No matter which holding cycle you’re in, the longer your home goes unrented, the less money you make, so your renovation process needs to be as quick of a turnaround as possible ($1,000 a day in renovation costs is a standard expectation). As you plan your renovations for 2024 and beyond, watch out for these rental renovation mistakes we frequently see out in the field.

Renovation mistake 1: Focusing on trends 

Your renovations should aim to give you the longest staying power, to ensure the property is attractive to renters and to help you avoid the need to renovate while the home is occupied. (It's always cheaper to keep renters in the property versus having to take it off the market when it’s time to find the next tenant.) To make sure you renovate it right the first time, go for timeless fixtures and clean lines over of-the-moment trends, to help with longevity. 

Renovation mistake 2: Choosing cosmetics over function

Aim to make the home as functional and as open as possible to give renters the ability to make it their own. Making prescriptive cosmetic changes or dividing up spaces so that every room has a distinct purpose could prevent renters from being able to decide what they want to do with the living space and impact your investment in the process. 

Renovation mistake 3: Neglecting major appliances and needed replacements  

Investing on the front end to ensure that your mechanicals are in good functioning order lowers your odds of needing to spend that money as an operating expense while you have renters in the home. It also decreases the likelihood of having a potential billback from them as a result. Upgrading big-ticket items like HVAC, hot water tank and appliances up front can save you time and effort once you have renters in place. A good rule of thumb is if the item is older than 10 years, consider replacing it as part of your rental renovation.

Renovation mistake 4: Not being on par with the rest of the neighborhood 

While you aren’t aiming for your property to be the nicest house on the block, you do want to meet the traditional standards of the neighborhood. You can do this by ensuring the exteriors blend in. For example, if every house in the neighborhood has a fenced-in yard and yours doesn’t, it’s probably a good idea to add one (or to remove a fence if other homes don’t have one). Making sure driveways and sidewalks are in good order not only helps with curb appeal, but also helps keep the property safe for tenants and guests.   

Renovation mistake 5: Neglecting the garage or basement 

While it may be cheaper to remove a garage that’s not in great shape versus renovating it, this could actually cost you in the long run. Garages add value to homes and are typically a big selling point for renters, especially if you’re in an area where they’re detached. Not finishing or renovating a basement can be another missed opportunity to maximize your investment. Depending on your market, renovating it could enable you to increase your rental rate per month by $500 or more.

Renovation mistake 6: Not upgrading your lighting 

Not upgrading your lighting is a mistake frequently skipped during renovations that’s an easy (and cost-effective) fix. Converting it all to LED means work orders for lighting will certainly decrease—and may even become nonexistent! And renters like the cost-savings generated by low-energy-consuming lighting.

SFR home renovation decisions can be challenging and vary based on a variety of considerations. But keeping your long-term plan in mind and sidestepping renovation mistakes like these can help you capitalize on your SFR investment.  

Turn to MCS for Your Rental Renovation Needs 

Looking for a partner to complete your SFR home renovations? MCS can help you make your planned upgrades—on time and on budget. We can deliver rental renovations of any scope and provide ongoing preventive maintenance and complete tenant turns, too. Learn more about how we can help you save money on renovating and maintaining your SFR portfolio by contacting Jason Myers or Kerry Anderson today.