Most investors approach a rental renovation the way they’d approach their own home: what would look great, and what will it cost? The better question is what the rent will actually reward, and the answer is usually less than you’d expect.
Troy Evans, Director of Investor Services at Marketplace Homes, has a straightforward approach to scoping work on a rental, and it starts before a single dollar is spent.
Start With the Comps, Then Look at the Photos
Pulling comparable rents isn’t enough. Evans says to look at what those comps actually looked like inside. If a similar house leased at $1,900, did it have laminate counters, oak cabinets with new hardware, and clean paint? Or a completely new kitchen and bathroom? Match that, not the highest-end version of it.
The reason is that finishes matter less than most investors assume. In Evans’ words, “Rent is primarily set by beds, baths, square footage, garage, and school zone; finishes just decide where you land inside a band those five inputs already set.” That band is usually a $50 to $100 window, and it doesn’t widen just because you spent more. Which is why kitchen renovations, in his experience, often have little evidence behind them. People want them because they’re pretty, not because they pay.
Put the Work Into the Purchase Price
If a house does need work, Evans says the time to deal with it is at acquisition: price it into the offer, negotiate a credit, or walk away. As he puts it, “Spending money on a house doesn’t entitle you to get it back.” The rent won’t make you whole just because you invested in the property.
Measure the Next Five Years, Not Dollars In Versus Rent Out
Evans also argues against judging a renovation purely on dollars spent versus rent gained, because that math talks people out of the work that matters most. The better question is what the next five years look like for the residents living there.
An HVAC system that’s already been replaced means no one sitting in an 88-degree house in July waiting on a compressor. A handled roof, water heater, and supply lines mean fewer emergency dispatches, no ceiling stains, and no drying equipment in the hallway for a week. That’s where renewals come from. A resident with a boring tenancy is more likely to renew at market, while one who has been through three system failures leaves. And that turn costs 30 days vacant, a make-ready, and a leasing fee, which is more than granite countertops were ever going to earn.
The Order of Operations
Evans’ sequence is systems and durability first, then the cosmetic items that get you to the middle of the comp set: LVP over carpet, one paint color, standardized hardware. His summary is simple: “Be boring and let it compound.”
The Takeaway
Rental returns come from keeping good residents in place, not from the finishes that photograph well. Evans put it this way, “limiting resident turnover is paramount to a properties long-term success”.