Commercial renovations allow you to capitalize on a growing demand for rental properties. Taking older buildings and renovating them to accommodate the changing needs of the younger generation gives you an opportunity to grow your rental income from these properties. Creating an inviting, functional living space can give you a leg up on the competition.
Consider These Key Factors
When choosing a property for renovation and rent, there are a few things to consider. Like buying a home for yourself, consider how these things may affect the potential rental income:
- The cost of taxes
- Condition of the HVAC system
- Local school proximity
- Nearby shopping
- Building history
- Public transportation availability
Planning Expected Renovations Ahead
Spend the time to consider what renovations the property needs to get the maximum rental income before purchasing the property. This can include obtaining a contractor bid for the work you feel needs most done. Have an inspection done on the property to rule out any high-expense work such as foundation repair or roof replacement. Older buildings may have plumbing and electrical issues to consider in your overall costs.
Stay Close to Budget
During any renovation project, costs can run away if you are not diligent. Delays can increase the time before a renter can move in. Change orders tend to be more expensive than deciding on aesthetics and work ahead of time. Have an idea of what your budget is and then have a cap for the max amount to spend and stay beneath that to ensure success.
Gentrifying older areas of town is a great way to move into the rental market. Commercial renovations allow you to turn these older areas into thriving centers with tenants eager to rent the spaces. Look for the expertise of real estate agents, general contractors and architects before making a purchase. The right contractor can make a huge difference in the overall project from budget to planning to final product.