Rental property renovations can cost thousands of dollars. The good news is that there are a ton of things you can do to reduce your costs. In this article, we’ll go over seven ways to save money on your South Florida rental renovation. That way, you can use your savings to grow your real estate investment portfolio instead!
#1 Identify What Needs to Be Renovated
You can’t (and shouldn’t) redo everything, so try to identify which parts of the property will give you the greatest return on investment. Ask yourself what you want to achieve with the renovation. If you want to lower tenant turnover, go for upgrades that will encourage tenants to renew their lease agreement. A property management company can help you pinpoint what these amenities are. However, if you want to raise your rental property’s value, you’ll need to budget for bigger upgrades such as roof repair.
If a $1,000 upgrade would enable you to add $50 to your rent, crunch the numbers and figure out how long it’ll take you to recover your initial investment. In addition, focus on areas of the property that desperately need sprucing up. If your bedrooms are the best but your en-suite bathrooms are so-so, that should tell you to renovate the bathrooms first.
#2 Set a Budget
If you’re going for budget-friendly upgrades, you’ve got to set an investment property renovation budget and stick to it. Whenever you undertake a rental property renovation, it is vital to know how much you can spend to the dollar amount. Work with a property management firm to help you put a price on materials – they’ve been in the business longer than you have, and they have a network of vendors that can help you with this part.
Don’t forget to budget for unexpected expenses. Some materials may not be available, and this will leave you with no choice but to purchase pricier alternatives. As a rule of thumb, you should add 10 percent more to your budget. So if your initial budget is $3,000, your final budget should be at least $3,300.
#3 Pay With Cash
We know that paying out of pocket can be impossible, but it’s better than putting your bill on your credit card. If you pay with your card, you will get tempted and purchase materials that weren’t in your initial plan. You’ll believe that you have thousands of dollars at your disposal when the truth is that you will have to pay your bills eventually. You will probably be in debt.
You know what they say, if you can’t afford to pay for it with cash, you can’t afford it at all. With that said, do not pay for rental property renovations with your card, even if you think you can pay it off.
#4 Replace the Toilets
One of the best ways to make your rental property look brand-new is by replacing the toilet. It benefits you and your tenants in more ways than one. Not only is it a low-cost improvement, but it also allows tenants to save on their water bills.
Replace your rental property’s toilets with low-flow toilets that have two flushes – one for number ones, and another for number twos. That way, whenever your tenants flush the toilet, they won’t end up wasting a ton of water. For reference, a “regular” toilet uses around 7 gallons of water per flush, while a low-flow toilet uses up to 1.6 gallons per flush – imagine the savings!
Need someone to install your low-flow toilet? A South Florida property management company can help by connecting you to reputable contracts, plumbers, etc. in your locality.
#5 Choose Statement Pieces Wisely
It can be tempting to buy high-end materials, but if you’re on a budget (which you probably are), you’ve got to choose what to splurge on. Spend your money on statement items, such as countertops made of premium materials, but go for low-cost options for the rest of the property.
As a general rule, spend more money on items that will “suffer” from the most wear and tear, such as floors, countertops, cupboards, cabinets, etc. These are all parts of the house that your tenant will interact with each day. As an example, you shouldn’t go all-out on decor such as chandeliers, sculptures, etc. as there’s a good chance your tenant will get rid of these in the end.
#6 Do it Yourself
This is one of the most obvious (and best) ways to save money on your renovation, but it’s worth mentioning that you should only do it yourself if you’re sure. If you attempt to DIY your renovation when you have no idea how to DIY, you’ll end up wasting your time (and money) on materials that were installed the wrong way. It would be better to pay a crew.
Of course, there are certain parts of the property that you can DIY, no matter how skilled (or unskilled) you are. As an example, anyone can paint a wall as long as they’ve got the right tools.
However, do note that you may not be allowed to rent out your property if you DIY the renovations. Some tasks, particularly those that involve the real estate investment’s structure, can only be done by a certified professional. With that said, it would be beneficial to be familiar with your local code.
#7 Do It One Room at a Time
When renovating your South Florida real estate investment, you do not need to renovate it all at the same time. In fact, it would be better to renovate it one room at a time. In this way, you won’t be overwhelmed by the amount of work that needs to be done, and the number of factors to consider.
By doing so, you’ll be able to make sound design decisions and make sure every room gets the attention it deserves. It’s also better for your budget because in case you have unexpected expenses, at least it’ll your problems will be “contained” in that one room.
As you can see, there are plenty of ways you can save on your rental property renovation. If you’re planning on upgrading your South Florida property any time soon, get in touch with the experts at Luxury Property Care. We’ve got a network of vetted vendors whom we can vouch for, and who can complete the work at a fraction of the typical cost.