What to renovate in a rental property?

Real Estate
1

I need to renovate an old property (5 rooms house, ~100sqm) that I intend to rent out but don’t have the money for a full renovation. I am paying interests on the mortgage so I’d like to fix the place up as soon as possible and find tenants, but I need to find a balance so that I spend as “little” as possible while maximising the rental yield.

Some things I must do, like renovate the electricity system, paint everywhere and redo the bathroom. Other renovations are optional, so I’d like to hear your opinion on what could bring the most bang for the buck:

1 - new kitchen (current one is ~15 years old with stone counter top in a decent state, but it’s small and without dishwasher - a 45cm dishwasher will be installed in case I decide to leave the old kitchen)

2 - remove wall between kitchen and dining room to allow more light into the dining room and have a kitchen island as separation (probably need architect/engineer to make static calculations and possibly install a beam to bear the weight currently carried by the wall)

3 - new guest WC (it’s small and right below the main bathroom, so probably good to do together with the other one, need to still check for asbestos)

4 - install new floors in living/dining room (currently old parquet that would look nice after sanding, but which makes sound when walking on it)

5 - change all doors in the house (currently these are original, wooden doors but they have been covered in plastic, which is now coming off and needs to be removed, then the door sanded and painted… got a quote for ~300CHF/door)

6 - remove wallpaper and fix walls properly (abrieb) instead of painting over the old wallpaper

7 - install an EV charging plug (there’s a private parking place right outside the door)

8 - change all radiators so that they all look the same (now it’s a mix of old and “new”)

9 - install a heat pump instead of the oil burner (other option is to wait for Fermwaerme which should come in the next 3/4 years)

Also, do people still want the TV antenna plug?

Thanks for your thoughts!
G

2

1, 4, 5 sound like a must have to me (as a prospective tenant). :smiley:
The rest would be 2nd, 3rd etc. priorities.

3

Dishwasher for sure.

For the rest it’s not clear how big it is and who is the target. If you expect to rent it to families, a dishwasher is absolutely necessary (we, for example, are hesitant to rent even a vacation apartment if there is no dishwasher), new second toilet and removing the wall would boost attractivity. As well as installing new soundproof doors.

Heat pump could be a nice öko touch if you target YUPs and DINKs. No, I would rather wait for Fernwärme and also explain it to tenants.

New floor and wallpapers would be my last priority.

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4

As a prospective tenant, what I look for are, in no particular order:

  • a modern, ideally italian shower. There can be a bathtub on top but I would never rent something with only a bathtub and no shower.

  • modern hobs.

  • efficient heating: I don’t want to pay high Nebenkosten/utilities bills. In your situation, I would wait for Fernwärme.

  • a modern washing machine and dryer, or sufficient space in a laundry room with the proper electrical and plumbing connections to install my own.

  • luminosity: either adequate, consistent and efficient lightning or good use of outside light.

  • privacy from my neighbors: good sound insulation and an ability to not be seen from the windows without the feeling of living in a bunker.

  • inside privacy if I am not living alone (soundproof walls and doors).

A general modern feel of the property is a plus but I wouldn’t extend my budget much just for that.

I would make an EV charging plug a requirement if I were driving an electric car but probably not many tenants do that (and I don’t either, mainly because I am a tenant too).

I would not care for a TV antenna plug but I don’t care for anything TV in general and may not be representative on that.

In your list, I’d go mainly for the more modern feel, so 1, 4, 5, 6 and 8.
It might not be cost effective and is pretty hard to tell without pictures of your property and an idea of what the competing appartments/houses in your area look like (many new and intelligently designed constructions or not).

Edit: as a side note for Fernwärme: if there isn’t yet a Fernwärme system in your town/city and the delay comes from making a new one, there are several things that could happen to push back the date at which it will actually be available for you. I wouldn’t sweat it much unless my heating system had to be replaced in the short term, in which case, I would probably not wait.

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5

There is Fernwaerme (place is in Zurich) and they first promised it for next year, but then pushed it forward to 2026/27. The current system needs to be checked but should definitely run fine for a few more years, but if I were to choose anyway a heat pump in the future, then I might as well do it now, or it would be more difficult with tenants in.

Maybe I open a separate thread comparing pros and cons of tele heating and heat pumps.

6

Modified the post to add information about the size of the place and specified that a dishwasher will in any case be installed. Right now I am thinking of a family as a target (but could change my mind), maybe 45cm (the biggest I could install in the old kitchen) is anyway not big enough? We fill a 60cm one every day and then some…

7

Oh sorry, I didn’t understand that this is a small one. Ours is 60 cm wide and is also getting filled every day.

I might be somewhat archaic in this respect, but for me kitchen is the heart of the household, especially if it is a family with children. That’s where I expect to spend most of the time and efforts at home.

2 Likes
8

Kitchens have usually relevant lead times, should consider it. But also 100m2 could be a home for a family, 45cm dishwasher may be good for a couple eating mostly outsude…

I believe in zurich area there are enough familys looking for more or less affordable appartments. Maybe there will be a time where cgeaper family appartments will be easier to rent since the others arent affordable for a family any more.

My advice:

  • Compare investments to possible rental income
  • Invest only minimum
  • dont threat it like your own home e.g. dont change the kitchen. If your tenant asks in xy year for a new one you can say yes but he needs to accept living few days on a construction site. Such things are often done when the tenants are on vacations - they pay rent while you do the work

Similar for an EV Plug. Maybe if he needs one he is willing to pay a part of it…

I think I would anyway go for the minimum, small dishwasher sanding some floors, new painting, remodeling the doors
Anyway hard to say without seeing pictures

3 Likes
9

That’s my goal indeed! Tips on how to do this?

If I were to treat it like my own home I would not renovate anything (maybe the bathroom), it’s the fact that it’s an investment that pushes me to renovate (because I can spend the money, it’s only that I would need to pause buying ETFs for a few months).

10

Find comparable objects and see how they are offerd. So one object with old kitchen, one with new etc. This would not be an exact science but still can give a hint.

I strongly believe that for private real estate owner it is often more interesting only do mimimum investing (apart from things conerning the structure like leaking roof etc).

  • less money invested
  • less hassle with color from the tenants kids om the brand new floor when they move out after few years
2 Likes
11

It’s really far from being an exact science because there’s very little comparable objects for rent in Zurich, I collected less than 10 in the last 4-5 months and the rent asked vary widely and I am not sure why just by looking at the ad. So I maybe got a rough idea about the location, the number of rooms and size of the place, but not enough data to gauge how much a new kitchen would add…

12

I vaguely remember that the Hauseigentümerverband used to have some publications about the economics of real estate. I’d consider getting some advice there.

1 Like
13

I’m in the same position. I want to renovate the house, but then am also thinking, why not just sell it and have less worries?