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Is Remodeling My Rental Property Worth It?

remodeling rental propertyOwning a rental property means taking responsibilities and some risk. But, as they say… no risk, no reward. Let’s help you get that reward, even when remodeling your rental property.

As a landlord, you are well aware that your rental place can become outdated or can even be cared for in less than optimal ways. Sometimes tenants complain and sometimes the place can be vacant for a long while. Remodeling that rental property may just be the solution.

Of course, sometimes you’ll wonder if remodeling is worth it. You may get nervous about the risk of spending the money and then not reaping the rewards. But in the end, keeping your rental property up to date and  looking great is a sound investment with only a few caveats.

The Almighty Tax Write-Off

remodeling rental propertyThis may be the single greatest reason you have for remodeling your rental place. As a landlord, you can deduct many costs like general maintenance, repairs, as well as improvements and renovations. The IRS does treat remodeling your rental property differently than simply doing repairs. Talk to your accountant or the IRS to know the specifics. Generally speaking, you can deduct the repairs in full. Remodeling requires you to depreciate the changes over several years. The only thing to keep in mind when claiming it on tax is that you need to keep it as a rental for that entire time.

Do Not Over-Renovate

Remodeling means nurturing your investment. In most cases, cosmetic and aesthetic improvements are better than massive changes and upheaval. After all, you’ll be out of pocket for the renovations, all the while remembering that owning the place is about making money. Make it warm, inviting, and livable. This is the easiest way to get a solid return on your investment. Look at your property as a house instead of a home. Remodeling with that in mind will make a big difference between blowing out a wall and replacing the flooring.

Rent vs Location

remodeling rental propertyThe decision to remodel your rental property hinges on several factors. Affordability is, of course, one of them. To recoup costs, will you need to up the rent? Can the tenants or the area afford that? Will the improvements be good for the area or could they be risk?

Even if it’s a lower income neighborhood, you can still renovate. Talk to renovation and construction experts to discuss options that don’t cost too much but wear well over time. Also discuss repairing and upgrading some things, instead of replacing.

Focus on the Important Stuff

What sells a home to a buyer also convinces a renter. Upgrade the bathrooms and the kitchen. They are among the biggest factors when buying and they are among the biggest factors for renting. As said before, make the place comfortable, livable, practical and simple. Keep the roof and windows in good shape. Ensure paint and tiles are always looking nice. Keep doors and windows secure. Make the yard and landscaping low maintenance.

Tenants are more likely to care for a place that is looking good than they are for a place that is looking “tired”.

Communicate

When in doubt, ask. Ask your home construction partners. Ask your rental agents. Ask your tenants. Being communicative and involved can sure help make things easier. You’ll find out what’s important for remodeling the rental place, and what isn’t high value. You’ll learn what people are thinking and the impression your place makes. Working together can sure make the process easier, while also enhancing the desirability of your rental property. Because people want to rent from landlords who communicate and are involved.

Greg NelsonGreg Nelson is the owner of Nelson Construction & Renovations Inc. He is a Florida State Certified Building Contractor, creating artistry in all areas of design and construction projects. He is a musician, and artist. A husband and father, Greg appreciates all the wonderful elements of family life.

Creative Commons Attribution: Permission is granted to repost this article in its entirety with credit to Nelson Construction and a clickable link back to this page.

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      • Nelson Construction out of Clearwater/Tampa fully remodeled our 7,900 sq ft home in Clearwater, Florida. To say they did a great job is an understatement. The qualities of this company extend beyond just a nice finish. Road blocks: Near the beginning of the remodel we ran into our first hidden challenge. To modify and create... Read More »

        BZ

      • The staff at Nelson Construction do a fantastic job of caring for their customers. They care about their work, their products, and the customer’s satisfaction in the final result. I also greatly admire their attention to legal rudiments, which some contractors try to skirt or dodge. Nelson Construction operates within all ethical codes and boundaries,... Read More »

        A.O. - American Power and Gas

      • We were satisfied with the level of service we were given by Nelson Construction and Renovations. The project manager was very communicative. Any time I needed an answer, the Nelson Team was there. Everyone was very professional and courteous, and the end result is beautiful.

        J.T.

      • “We highly recommend Nelson Construction and Renovation, Inc. We are totally satisfied customers. Nelson Construction will always be our first recommendation to friends who want to build. “Our project was the 2014 renovation and expansion of a 600 square foot 1950’s bungalow in Safety Harbor’s historic district. Our goal was to create a space suitable... Read More »

        Ann Morgan & Margo Pfleger

      • On behalf of the whole CCHR Clearwater team, we would like to thank you and your company for the stellar work on our new building – which did open on time! Even though we were very pressed for time and things were very hectic, your supervisor remained stable and your work areas somehow remained organized.... Read More »

        Jamie Blackstone - Renovations Supervisor – Citizens Commission on Human Rights

      • Nelson Construction and Renovations exceeded our expectations on our fairly good-sized job (new addition and complete living room and kitchen remodel). I have never worked with a company before that was this intent on making our project a total success AND was so fast and efficient. In addition to that, they routinely went above and... Read More »

        Scott and Holly - Clearwater, FL

      • This letter is to commend Nelson Construction for the excellent job done on our kitchen renovation. When we returned from vacation we were surprised to see the difference and how great it all looked. We expected to see a mess, but everything was cleaned up perfectly; and your company did even more than we expected... Read More »

        The Baldwins

      • Thank you for the job well done! I have renovated several houses and know the hassles that often come with these endeavors – dirt, delays, redo’s, cost, contract issues, etc. I was planning to renovate my kitchen for many months, but kept putting it off, simply trying to avoid the expected hassles. Once I finally... Read More »

        W. Nero

      • Mr. Nelson was my contractor for a major house renovation in March 2006 and also my office renovation in June 2006. He is a rare commodity in the construction industry. He is honest, efficient, on time, on schedule and overall a pleasure to deal with. In my area, where real estate values are climbing and... Read More »

        Michael Haldane - Managing Partner/Executive Producer – The Radke Film Group

      • Our school was in great need of a new roof. Sorting through the various types of roofing and installations was very overwhelming, and for such a large project, we needed to be certain we were making the most cost-effect decision we could. So we hired Nelson Construction to be an Owner’s Representative to help navigate... Read More »

        T. Campana

      • Nelson Construction is a valued company, steadfast to a strict, honest and drug-free work environment. The most notable point of Nelson Construction’s service was the quality work and professional integrity. My project met all of my expectations and more. Project Images (*Click image to enlarge)

        S.K. - Clearwater, FL

      • The most notable part of Nelson Construction and Renovations’ service was their attention to detail. Great all around service and finished product!

        YA

      • Thank you for giving us a new home that we love. Every time we look around we are reminded that we made the right decision to go with Nelson. We shall recommend you to anyone who asks and would be happy to serve as references for potential clients.

        Margo & Ann

      • Your Concrete Design Website is very impressive. Beautifully put together and inviting to the design community.

        M.N.

      • In short, we love our home. It is gorgeous. The counter tops are amazing, the cabinetry is perfect. Overall we are so happy! Project Images (*Click image to enlarge)

        SS

      • We couldn’t be happier and we plan to use your company on any upcoming project that we have. The employees and subcontractors were very professional; it was something we noticed right away. The job site was cleaned every day, and my cleaning lady even noticed and told our friend about it. The level of communication... Read More »

        AP

      • You and your guys are the BEST!!! It is such a pleasure to be able to open my home and leave for the day and know there will not be a problem. Your staff is like family! Project Images (*Click image to enlarge)

        JB

      • Nelson Construction has been the best construction company that I have ever hired. I am sure that they are not the cheapest but they offer an excellent product and are very professional. They stayed in daily communication to let me know the status of the project. Their crew was friendly, courteous and conscientious. They showed... Read More »

        SG

      • Working with Nelson was like no other experience I’ve ever had–and I’ve done a ton of work on my very old house. They’re so professional and stayed in close communication with us. I will NEVER use any other contractor again! I can’t say enough good things!

        Joy Gendusa - CEO - PostcardMania

      • Nelson Construction delivers every time: quality product, on time and in budget, no surprises, no rip-offs, stellar service and product, communication and genuine interest in finishing the product 100% to my satisfaction (and theirs)!

        Stacey Tiveron - CEO - Trade Only Design Library (TODL)

      • I wanted to tell you how pleased I am with the work done by Nelson Construction & Renovations. The external deck and 2 stairways your company recently built at my North Clearwater Beach apartments exceeded my expectations. I was very impressed with every aspect of the operation in the work and the interaction with me... Read More »

        BF