The rental market in Phoenix is strong, but there’s always room for improvement when we’re talking about your property value and your rental yield. How can you earn more on your investment property now, with rents rising again early this year and demand for rental homes pretty strong? Is there any way to keep earning more?
There is, actually.
We know that maintenance costs have risen as well, and we understand that renovations and upgrades can be time-consuming and expensive.
They’re still worth it.
Making even minor improvements and updates to your property will ensure your rental remains competitive in the market. You’ll have an easier time attracting high-quality tenants. And, the value of your property will increase.
Assuming your property is already in good shape, a full rehab probably isn’t necessary. Instead, consider some of these cost-effective improvements that will drive up what your property earns in rent.
Be Strategic When Deciding on Renovations
Where do you want to focus your renovations?
You need to be strategic about the scope of work and the purpose of your project when the goal is to maximize your rental yields.
Most tenants care most about kitchens and bathrooms. They care about energy efficiency, convenience, and smart home tech.
Think about the market, the competing properties, and what tenants are looking for. Then, remember that the specific improvements and upgrades you make depend on your investment goals and the current condition of your property.
Curb Appeal Counts for Phoenix Rental Values
First impressions are extremely important, and we’re going to assume you already know this.
First impressions are especially powerful when we’re talking about your rental property. Think about the marketing photos. Think about the listing and the showings. What will prospective tenants think when they drive or walk through your neighborhood? Will your property stand out?
Prospective tenants will make decisions about whether or not to see your home based on how it looks on the outside. So, when you’re thinking about the upgrades that will bring in more money than they’ll cost, consider the importance of your curb appeal. You can make some high-quality, low-cost improvements such as:
Fresh exterior paint, especially if the existing paint is chipped or faded from the sun. Phoenix gets a lot of sun, and it’s a strong heat that beats against the outside of your home and its paint.
Take a look at your trim as well, and your front door. Perhaps painting the front door and simply power washing the rest of the property will be enough to brighten up the outside of the place.
New landscaping that’s attractive but also simple and easy to maintain. Tenants won’t want to worry about keeping up with extensive gardens or delicate rose bushes. It’s hard to have a lush grass landscape in Phoenix, so opt for landscaping materials and designs that are compatible with our local climate.
Attractive and secure lighting.
All of these outdoor improvements things are simple, and affordable, and can help boost curb appeal and attract potential renters. Remember that your property's exterior is a reflection of what's inside, so make sure it looks the part.
Fresh Paint is a Necessary Improvement
You might not even be thinking that paint is a renovation, but the magic that a fresh coat of paint can work inside your property is always impressive. New paint is usually necessary during every turnover period, so make sure you’re adding it to your move-in and move-out maintenance checklists.
Attractive Phoenix rental homes have walls that are clean, freshly painted, and modern. They should be well-insulated and painted in neutral colors. You don’t want red paint in the bedrooms or wood paneling in the living room. Hopefully, you have already torn down any peeling or aging wallpaper.
New paint is not exactly cheap, especially when you’re wisely investing in quality paint. But, when you look at what it delivers, it is a cost-effective update that’s easy for you to make. It can easily be used to improve the value of your property. When a prospective tenant walks into a freshly painted home, they notice. It looks fresh, it smells fresh, and it’s an instantly inviting space when there’s new paint on the walls.
If you rent out a number of investment properties, buy the paint in bulk and use the same palette for each rental home. You’ll save some money and enjoy some consistency.
Are You Providing In-Unit Laundry?
Tenants will always be willing to pay more rent when there’s a washer and dryer available to them.
This was once a luxury amenity, but more and more tenants are refusing to even consider homes that don’t come with a washer and a dryer. Investing in these appliances will allow you to charge more per month in rent.
Same with the paint: if you own several rental properties and you decide to put washers and dryers in all of them, you can likely get a good discount when you’re buying them.
Forget the Carpet and Upgrade to Hard Surface Floors
Carpet is no longer the preferred surface for most Phoenix tenants, and you can understand why. Those carpet fibers can trap allergens, dust, and dirt. If your tenants have pets, it’s often difficult to remove pet odors and stains from the carpet. You’ll find yourself cleaning it often and replacing it every few years.
Consider hard surface flooring and the benefits it can bring to your rental property. This is an easy upgrade that requires an initial investment, but will essentially pay for itself. You’ll find your home is more attractive to tenants and there are fewer replacement costs for you down the road.
Hardwood floors would be great, but they’re also pricey. You don’t have to invest in organic bamboo. Try looking at laminates and faux wood. Even some types of vinyl look great and don’t cost a lot. This is an ideal floor surface for hot, long Phoenix summers.
Maximize Rental Yields with Energy Efficiency
Energy-efficient renovations are not just good for the planet; they're attractive to tenants who are increasingly conscious of their carbon footprint and their utility bills.
Consider upgrading windows, insulation, appliances, and HVAC systems to more efficient models. These renovations can be a selling point for your property, appealing to environmentally-minded renters and those looking to save on energy costs.
Start with an energy audit so you know where you can make the most of your upgrades and updates. You might simply need to switch out your light bulbs to LED-style lights to have an impact.
Phoenix Tenants are Looking for Smart Home Technology Features
Smart home tech is another update that can make a big difference in your rental yields.
When you choose the right smart home tech to invest in, you’ll find that you’re able to raise your rents, attract and retain tenants, and provide a property that’s more competitive in the rental market. Some of the most popular smart home tech updates will include:
Security features such as alarm systems and video doorbells. When tenants have a video doorbell installed, they can see who is at the door before they open it. They can also see when packages are delivered.
Smart thermostats, which are also popular and meet your goal of providing a greener and more energy-efficient rental. Tenants can leverage the intuitive and predictive nature of a smart thermostat to keep their home comfortable without wasting money on high electric bills.
Lights that can turn on or off via an app or a pre-set control panel are also a wise investment. When tenants can simply tap their phones to turn on their interior lights as they approach their home, they’ll feel safer and they won’t have to leave those lights on all day.
This might have been a bit too much for a rental property several years ago, but it’s becoming more essential now.
Renovating a Phoenix Kitchen
What do you think is the most important room in the house for your future renters?
It’s the kitchen.
Tenants will look closely at kitchens when choosing a rental property. What are you providing in your home and where can you make some simple renovations? Most tenants want an open kitchen with plenty of counter space, storage, and matching appliances. They won’t be willing to pay higher rents if your kitchen has faded cabinets and drawers that stick.
Invest in attention-grabbing renovations like shiny faucets and new hardware. Energy-efficient appliances are a great idea, especially if yours often needs to be fixed or look old.
You can easily install a backsplash against the kitchen wall, near the stove or sink. It looks modern, tasteful, and expensive - even if it’s not. You don’t have to use marble tiles, but something like plain white tiles or glass will not only improve the look of your kitchen - it will also protect your walls.
These improvements are aligned with what we know tenants are looking for in their next rental home. It’s also important to choose the renovation projects that work best for your specific property in your specific neighborhood. We’d be happy to make some customized recommendations based on the home you’re renting out.
When you’re ready to earn more on your Phoenix rental property investments, please contact us at Service Star Realty. We’d love to be your investment resource and your trusted Phoenix property management partners.
Service Star Realty
2929 East Camelback Road #119, Phoenix, AZ 85016
(480) 426-9696
