In a competitive rental market, some Back Bay property owners would try to gain an advantage. A number of them think that building a dream kitchen will help attract higher-paying tenants. Tenants like these are in the market for a rental home with a quality kitchen— which is different from a luxury kitchen. Truth be told, high-end or luxury upgrades rarely result in a higher rental rate. The only way this would happen is if your rental home is in a market that supports higher rent and if your entire home has been upgraded as well. If it isn’t, then your best bet is to create a kitchen that features less expensive and more durable elements.
Homeowners often dream of upgrading their kitchens with high-end cabinets, appliances, countertops, and flooring. But the general truth is that expensive materials such as granite and hardwood are notoriously difficult to look after. They get damaged easily and often require a lot of work to maintain properly. Homeowners may think it’s a good deal— that the extra effort is worth living in a beautiful kitchen— but a tenant may not see it that way. Materials that cost so much to repair or replace aren’t ideal for a rental home. It increases your maintenance costs and gives the responsibility of maintaining that level of luxury to the tenants— something they may not appreciate.
There are additional reasons why creating your dream kitchen is not the best project for your rental property. Tenants are usually more attracted to rental homes that have been built to reduce the amount of upkeep required. They do still prefer quality appliances and updated features. But quality and luxury are two different things, and tenants tend to view a high-end kitchen as more of a hassle than a bonus. So, even though it may seem that having a high-end kitchen will let you charge more rent, your tenants may not be willing to pay a higher rate for that feature alone.
It’s going to be problematic if you’re planning to remodel your kitchen where its quality would no longer match the rest of the rental property. Inconsistent upgrades would actually put the rental property at a disadvantage. Let’s say a house has a really luxurious kitchen but it also has dingy, dated bathrooms or worn carpeting. It would be safe to assume that any prospective tenant would take that as a red flag. They may not view your rental home as complete. They may think it’s an unfinished project that isn’t ready to be lived in. Upgrading one room in the house, especially when it’s not in an upscale area, does little to increase your property values.
As an alternative to spending big on a high-end kitchen, think about doing a few simple updates instead. An inexpensive and durable countertop and floor, a matching set of new appliances, and some new fixtures can make an older kitchen feel fresh and modern. You can give a worn cabinet an updated look by simply painting or resurfacing it. This will instantly bring a dated kitchen into the present for only a fraction of the cost. Don’t think that the little things have no effect. Even a new light fixture and drawer pulls can do a lot to add charm and give the room an updated feel. An added bonus is the peace of mind you get because you no longer have to worry about whether your tenant will damage your expensive tile, stainless steel appliances, or granite countertops.
To summarize, if you don’t have a budget big enough to complete high-end upgrades with consistent style and quality throughout the whole investment property, you’d do better by going for quality mid-range improvements. Still, it’s not easy to figure out which upgrades add value to your rental property— which corresponds to rent increases. This is where the professional Back Bay property managers at Real Property Management Commonwealth can lend a hand. Our industry expertise and quality remodeling contractors can work with you to find out the best ways to develop your rental property to optimize your rental rates and increase your property values. Contact us or call us at 617-299-2342 for more information.
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