Does COVID-19 have you faced with an unanticipated vacancy? Instead of seeing an empty apartment, now’s the time to see an opportunity to improve your investment and increase your ROI with an apartment renovation. Normally by now, the Boston rental market is in full swing. Agents are doing a fantastic job adapting to ‘Corona Era’ showings. However, with restrictions on in-person showings and hesitation in the market, data indicates that overall rentals are down in volume versus last year by close to 40%.
That said, once restrictions are lifted, many sources believe the local real estate market will recover quickly. In the meantime, if you have a short term vacancy, now is the perfect time to update or renovate your apartment and maximize your rent potential.
Investing in an apartment renovation, specifically updating an older kitchen and or bathroom, will certainly draw more attention and interest to your apartment. Boston has experienced a housing boom in recent years, with a focus on condo-quality inventory and high-end finishes. While not all tenants are looking for full-service high-end buildings, there’s a resulting expectation for condo-quality finishes even in brownstone apartment rentals. Having a newly renovated apartment will increase interest and often lead to multiple application submissions – giving you the opportunity to select the best tenants for your unit.
In the short term, an apartment renovation means you’re shelling out for the cost of the work and carrying costs while the unit is vacant. That’s certainly a big factor in deciding whether or not to take on that renovation project. However, once updates are complete, there’s a big opportunity to maximize that rental income, especially come year two.
Of course, the cost of a renovation project varies based on unit size, existing mechanical, electrical, plumbing, and finish selection. But given the apartment has a standard ‘city-sized’ kitchen and bathroom, you can expect to invest anywhere from $12,000 – $20,000 for a standard bath and $30,000 and up for an entirely new kitchen. There are also creative ways to pick and choose your updates to minimize the cost but still update your look.
We recently updated a vacant apartment in Beacon Hill (see photos above) and after 8 weeks of work, this apartment has a brand new kitchen, updated bath, and refinished floors. We’re expecting a 25% increase in rent in year one! We strategically picked finishes that allowed us to adhere to a lean budget and timeframe, minimized downtime, and have an immediate impact on the potential return for the apartment owner.
Even though the current state of the rental market is not ideal for landlords, there could be a silver lining in transforming your short term vacancy into an opportunity to increase your ROI with a simple renovation project.