Updating a rental condominium unit yields dividends only on some occasions. Increasing the property’s value and raising its profile to make it more marketable can be challenging because of your limited improvement options.
When you identify the upgrades you want, you must get the nod from the condo or homeowners association. You must consider when renters genuinely want or your projects may not bear fruit when you get the green light.
Even the cheapest home improvements can hurt your pocketbook when they accomplish the opposite of your intention. Understand which rental condo upgrades you should and shouldn’t finance to get the most bang for your buck.
6 Upgrades That Are Worth the Expense
These home improvements can make your property more appealing to the current tenants.
1. Electrified Appliances
Converting gas appliances into electric ones is a surefire way to reduce your rental unit’s carbon footprint. Green improvements satisfy millennials and Gen Zers’ sensibilities. These generations represent 21.7 million renters and are more supportive of initiatives addressing climate change than their older cohorts.
Switching from gas to electric can be costly and complicated. Still, you can make small changes and win sustainability points from eco-warriors. The stove, oven, clothes dryer and water heater are the most affordable to electrify.
If an upgrade exceeds your budget, explore financial incentives. Many utilities and governments offer rebates to encourage property owners to switch. Do your research to determine whether the work qualifies for available incentives in your area.
2. Smart Home Technology
A Rent.com poll found that 35% of renters consider smart devices — electronics working together to create a remotely controllable network — important or extremely important. This figure is bound to increase over time.
Nearly 84% of households in the United States will have a smart device for control and connectivity by 2028. Analysts also expect the other five smart home segments — security, energy management, comfort and lighting, smart appliances and home entertainment — to sustain their upward trends.
Investing in a smart home system can be a costly proposition. The good news is that you don’t need a complete overhaul to impress tenants.
Most smart device owners already have a voice control system and some smart appliances. Invest in less common but desirable ones — like smart thermostats and outlets. Rental condo units with these sought-after features will outshine properties lacking them on listing sites.
3. Electrical or Plumbing System
Electrical and plumbing system upgrades are essential capital improvements. Homebuyers would rather bid on properties with modern wiring and pipes than update old residential infrastructure. Renters with options gravitate toward condo units with compliant systems.
Having up-to-code systems is an attractive selling point in a real estate market where 49% of the housing stock is at least 42 years old.
Moreover, an electrical system overhaul complements your appliance electrification efforts. It increases your property’s amperage capacity to meet additional power requirements. On the other hand, a plumbing system update can beautify your space and boost its water efficiency.
4. Storage
A HomeAdvisor survey revealed that 48% of Americans dislike their bathrooms, laundry areas and dining rooms being too small. Although you can’t build up, down or out to increase your rental condo’s square footage, you can create an illusion of space with thoughtful storage improvements.
Regardless of how small your rental is, you can keep it clutter-free and organized by:
Maximizing wall space with shelves
Using multipurpose furniture
Having narrow cabinets
Hanging hooks behind doors
Creating secret compartments within stairs and steps
Your imagination is the only limit. Many storage solutions are low-cost and cause hardly any disturbance. Prioritize them if you’re on a budget to transform your space without spending a fortune.
5. Energy-Efficient Windows
Did you know that 54% of renter households want better indoor air quality? About 36% worry about pests, while moisture and mold bother 32%.
Few upgrades can address these concerns than an energy-efficient window replacement. Casement, double-hung and sliding windows are excellent natural ventilators. Airtight units keep outdoor pollutants out so indoor air is fresh and healthy.
Moreover, products with low-emissivity glass boost your rental’s insulation. They help regulate your room’s air temperatures and keep moisture under control.
6. Accessibility Features
People aged 65 or older head 7.2 million renter households, which will continue to rise in the next 20 years.
You must equip your rental condo with basic accessibility features if aging individuals are your primary target tenants. Grab bars, lever handles and a curbless shower are terrific additions to meet seniors’ mobility needs.
2 Upgrades That Are Money Wasters
Not all home improvements can increase a rental condo’s value and magnetize many tenants. These two prove that.
1. Upscale Kitchen or Bathroom
According to the 2023 Cost vs. Value report, splurging on kitchen and bath remodeling projects is a losing strategy when selling your property. They have a cost recovery of 31.7%-36.7%, returning more or less one-third of your expense at resale.
You may or may not be able to recoup potential losses by charging higher rent.
Nearly half of all renter-occupied households spend greater than 30% of their income on housing. Rent eats up more than 50% of the salaries of 25% of tenants.
High-end kitchens and bathrooms can justify expensive rent. However, they may repel cost-conscious individuals and price out low-income earners who account for a sizable portion of the renting population. If you find willing tenants, the chances of offsetting your potential loss after charging higher rent may still be low.
Such upscale projects make more sense in primary residences than rentals. Spending five to six figures and losing 60% of your cash is an unsound investing practice.
2. Non-Neutral Paint
Neutral colors lack low intensity or saturation. White, black and gray are the classic three. Taupe, tan, beige, cream and ivory also fit the mold.
Neutrals usually have subtle undertones that appear different in various lighting. They can mesh with anything on the color wheel, existing quietly in the background as visually dominant hues take center stage.
Conversely, making any non-neutral color the subject of a paint job doesn’t favor anyone. Primary and secondary colors are typically overwhelming in large quantities. They can set unwanted moods for the rooms. Even when they work, burgundy, amber, cobalt, mauve, emerald or pumpkin go against most people's tastes.
If you disallow tenants to repaint your unit’s walls and ceiling, color them with cool or warm neutrals to highlight accent features. They’re universally safe in interior design, even if they’re not everyone’s favorites.
Make Your Upgrades Count
Betting on the wrong home improvements to boost your rental condo’s value and marketability can be expensive. Consider the above six upgrades and avoid the other two to reduce the risk and receive higher returns.
Evelyn Long is a writer that specializes in housing market trends. She is also the founder of Renovated Magazine, where she writes essential resources for renters and homeowners. She has contributed to several other sites like National Association of Realtors and Realty Executives.