Renovations That Add the Most Value to Rental Properties (ROI Ranked)

By PropsManager Team · Maintenance & Repairs · Feb 28, 2025

I've watched landlords sink $40,000 into a kitchen remodel on a property that rents for $1,200 a month. That math never works. Ever. Yet I've also seen a $3,500 renovation package — paint, new hardware, updated light fixtures — justify a $200/month rent increase that paid for itself in 18 months.

The difference between a smart renovation and a money pit comes down to one thing: understanding which upgrades actually move the needle on rent and property value, and which ones just make you feel good about your building.

After managing hundreds of rental units and tracking the ROI on every dollar spent, here's what I know for certain — some renovations practically print money, while others are just expensive hobbies.

Why Renovation ROI Matters More Than Curb Appeal

Let's get something straight. You're not renovating your primary residence. You're renovating an income-producing asset. That means every single dollar you spend needs to either:

• Increase monthly rent enough to recoup the investment within 2-3 years
• Reduce vacancy by attracting tenants faster
• Lower maintenance costs over the long haul
• Increase the property's appraised value for refinancing or sale

If a renovation doesn't hit at least two of those targets, skip it. Seriously.

The National Association of Realtors reports that the average ROI on home renovations is around 60-70%, but rental properties play by different rules. Tenants don't care about the same things buyers care about. They want clean, functional, and modern-looking. They don't need Carrara marble countertops.

The Renovation ROI Ranking: Best to Worst

Here's my honest ranking based on years of tracking actual returns across properties ranging from $800/month studios to $2,500/month single-family homes.

1. Fresh Paint (ROI: 300-500%)

This is the single highest-ROI improvement you can make. Full stop. A gallon of quality paint costs $35-45, and you can repaint an entire apartment for $200-400 in materials if you do it yourself, or $800-1,500 if you hire it out.

But here's where most landlords screw it up: they pick colors they personally like instead of colors that photograph well and appeal to the broadest tenant pool.

What works:

• Light gray (Benjamin Moore's "Revere Pewter" or Sherwin-Williams' "Agreeable Gray")
• Warm whites (not stark hospital white — think "Alabaster" or "Swiss Coffee")
• Soft greige tones that make rooms feel larger

What doesn't work:

• Accent walls in bold colors
• Flat finish paint (use eggshell or satin — it's washable)
• Cheap paint that needs three coats and looks streaky

A fresh paint job on a tired-looking unit can justify a $50-100/month rent increase on its own. On a $400 material cost, that's a payback period of 4-8 months. Name me another investment that returns that fast.

2. Flooring Replacement (ROI: 150-250%)

Carpet in a rental is a ticking time bomb. Every turnover, you're looking at $500-1,500 in cleaning or replacement costs. After three years, most carpet looks terrible regardless of how careful the tenant was.

The move: Replace all carpet with Luxury Vinyl Plank (LVP).

Good LVP runs $2-4 per square foot for materials. For a 1,000 sq ft unit, you're looking at $2,000-4,000 installed. But here's the math that makes it a no-brainer:

• LVP lasts 15-20 years in rental environments
• It's waterproof (pet owners love this, and so will you)
• It's scratch-resistant enough to handle furniture moves
• Cleaning between tenants takes hours, not days
• It looks like hardwood but costs a fraction

I've tracked this closely: units with LVP flooring rent 5-10 days faster than identical units with carpet. At $1,400/month rent, those 5-10 vacant days cost you $233-467. Over five turnovers, you've saved $1,165-2,335 in lost rent alone — plus whatever you would've spent replacing carpet each time.

For a deeper breakdown, check out our post on the best flooring options for rental properties.

3. Kitchen Updates — Strategic, Not Gut (ROI: 100-200%)

A full kitchen remodel averaging $25,000-50,000 makes zero sense for most rentals. But targeted kitchen upgrades? Those are gold.

The $2,000-3,500 kitchen refresh:

That $2,000-3,500 investment regularly supports a $100-200/month rent increase. I've done this exact package on at least a dozen units, and it works every single time.

The key insight: Tenants don't open cabinets during showings and inspect the construction quality. They glance at the kitchen and form an impression in about 3 seconds. Make those 3 seconds count with surface-level improvements that look expensive but aren't.

4. Bathroom Vanity and Fixtures (ROI: 100-175%)

Bathrooms are where cheap landlords get exposed. A dated, yellowing vanity with corroded fixtures screams "this landlord doesn't care." And tenants who see that will treat your property accordingly.

The budget bathroom transformation ($300-800):

• New vanity with integrated sink: $150-350 from any home improvement store
• Modern mirror (framed, not the plain builder-grade plate): $40-80
• Updated light fixture: $50-120
• New faucet: $60-100
• Fresh caulk and grout (free if DIY, $100-200 if hired)

That's it. You don't need to retile the shower. You don't need heated floors. You need the bathroom to look clean, modern, and well-maintained.

I once spent $650 updating two bathrooms in a duplex. Both units had been vacant for 3 weeks. After the updates, we had signed leases within 6 days — at $75/month higher than the previous asking price. The renovation paid for itself in under 5 months.

5. Curb Appeal and Exterior (ROI: 75-150%)

First impressions aren't just important — they're everything. A prospective tenant decides whether they want to live somewhere in the first 7 seconds of pulling up to the property. That's before they even get out of the car.

High-impact, low-cost exterior upgrades:

• Paint or stain the front door ($30-60): A bold-colored front door (navy, black, or dark red) photographs beautifully for listings
• Update house numbers ($15-30): Oversized modern numbers instantly elevate the look
• Landscape basics ($100-300): Trim everything, add fresh mulch, plant a few perennials
• Exterior lighting ($50-150): Solar path lights and a new porch light fixture
• Power wash ($50-100 rental or $200-300 hired): Makes siding, walkways, and driveways look brand new

Total investment: $250-650. The rent increase is modest — maybe $25-50/month — but the real value is in reduced vacancy. Properties with strong curb appeal rent 30-40% faster according to Zillow research.

6. Smart Home Features (ROI: 50-125%)

This one's increasingly important, especially if you're targeting tenants under 40. And it's surprisingly cheap to implement.

• Smart thermostat (Nest or Ecobee): $120-250, and it can reduce utility costs 10-15%
• Smart lock (August or Schlage): $150-250, eliminates rekeying costs between tenants
• USB outlets in kitchen and bedrooms: $15-25 each to install
• Video doorbell: $100-200

A basic smart home package runs $400-700. It won't justify a massive rent increase by itself, but it absolutely differentiates your listing from the competition. In competitive markets, that's the difference between 20 inquiries and 2.

If you're managing multiple properties, tracking which units have smart features installed — and their maintenance schedules — gets complicated fast. That's where a platform like PropsManager becomes invaluable. You can log every upgrade, track costs against rental income, and see which renovations are actually delivering ROI across your portfolio.

7. Washer/Dryer Hookups or In-Unit Laundry (ROI: 75-200%)

If your unit doesn't have laundry and there's a feasible way to add it, this is one of the most powerful rent-boosting renovations you can make. In-unit laundry is consistently the #1 most-searched amenity on rental listing sites.

Adding hookups (if plumbing allows): $500-2,000 Compact stackable washer/dryer: $800-1,400

In most markets, in-unit laundry adds $75-150/month to rent. That's a payback period of under 2 years, plus the added appeal dramatically reduces vacancy.

Renovations to Avoid (The Money Pits)

Just as important as knowing what to do is knowing what to skip. These renovations might seem logical, but the numbers rarely work for rentals.

High-End Countertops

Granite or quartz countertops cost $2,000-5,000 installed. Tenants don't pay more rent for countertop material. A clean laminate countertop in a neutral color does the job. If you really want an upgrade, butcher block adds warmth for $300-600.

Crown Molding and Trim Work

Beautiful? Yes. Worth it in a rental? Almost never. Crown molding costs $500-1,500 to install and adds zero to monthly rent. Tenants don't notice trim details.

Built-In Shelving or Custom Closets

Custom closet systems run $1,000-3,000. A simple wire shelving system from a hardware store costs $50-100 and serves the same function. Save the custom work for your own home.

Swimming Pool Installation

Just... don't. The liability alone should scare you off, but the $30,000-60,000 installation cost plus $200-400/month in maintenance makes this a losing proposition for all but the highest-end vacation rentals.

Over-Landscaping

A well-maintained yard is important. A $5,000 landscaping design with irrigation systems and ornamental trees is overkill for a rental. Tenants want "not embarrassing," not "featured in Better Homes & Gardens."

The Renovation Decision Checklist

Before spending a dime, run every proposed renovation through this checklist:

• Will this increase monthly rent by at least $50?
• Will the investment pay for itself within 24 months?
• Is the upgrade durable enough to survive 3+ tenant turnovers?
• Does this fix something tenants frequently complain about?
• Will this reduce my maintenance or turnover costs?
• Does this make my listing photos significantly better?
• Am I choosing this because it makes business sense, or because I personally like it?

If you can't check at least 4 of those boxes, reconsider the project.

How to Budget and Track Your Renovation Spending

Here's where most landlords fall apart: they do the renovation, collect the higher rent, and never actually verify whether the investment paid off. You've got to track this stuff.

For every renovation:

1. Document the total cost (materials + labor + your time at a reasonable hourly rate)
2. Record the rent before and after the renovation
3. Track vacancy duration before and after
4. Calculate actual payback period once the unit is occupied
5. Note any maintenance cost changes over the following 12 months

Doing this manually across multiple properties is a headache. Spreadsheets get messy. That's exactly why we built PropsManager — to give landlords a clear picture of how every dollar spent on their properties translates into returns. You can track renovation costs, compare rent performance across units, and make data-driven decisions about where to invest next.

Check out our pricing plans to see which tier fits your portfolio size.

Timing Your Renovations Right

Don't renovate while a good tenant is paying rent. That seems obvious, but I've seen landlords displace reliable tenants for a renovation that could've waited until the next turnover.

The ideal renovation window:

• Between tenants (obviously)
• During slow rental seasons (November-January in most markets) when contractors are cheaper and more available
• When you're refinancing and need a higher appraisal
• When comparable properties in your area are getting higher rents with similar upgrades

Bundle renovations. If you're going to have a unit vacant for two weeks anyway, do the paint, flooring, and kitchen hardware all at once. One vacancy period, multiple upgrades. Trying to renovate in three separate windows means three periods of lost rent.

If you need help coordinating maintenance and renovation schedules across your portfolio, our maintenance tracking tools keep everything organized — from contractor contacts to cost tracking to completion timelines. You might also find our guide on the checklist for turning over a unit in 24 hours helpful for planning your turnover renovations.

Real Example: The $4,200 Renovation That Added $275/Month

Let me walk you through a real project. I had a 2-bedroom unit built in 1998 that was renting for $1,100/month. Good bones, good location, but it looked every bit of its age.

The renovation breakdown:

The result: Listed at $1,375/month. Had 34 inquiries in the first week. Signed a lease at asking price within 9 days.

The $275/month increase means the renovation pays for itself in 15.3 months. After that, it's pure profit — for years. That's a roughly 215% first-year ROI, and it only gets better as time goes on.

That's the kind of return you should be targeting with every renovation dollar. For more on managing the financial side of your properties, see our breakdown of the hidden costs of being a landlord.

Explore More PropsManager Resources

Looking for the right property management software? Check out our in-depth guides:

• Compare Property Management Software — See how PropsManager stacks up against Buildium, AppFolio, Rent Manager, and Propertyware.
• Software for Small Landlords — Built for landlords managing 1–50 units without the enterprise price tag.
• AI-Powered Property Management — Discover how automation can save you 5–10 hours per week.
• Solutions for Property Managers — Scale from 50 to 500+ units without scaling your costs.

Frequently Asked Questions

What renovation gives the best ROI on a rental property?

Fresh paint is consistently the highest-ROI renovation for rental properties, delivering 300-500% returns. A $200-400 DIY paint job (or $800-1,500 professional) using neutral colors like light gray or warm white can support a $50-100/month rent increase. It also makes listing photos look dramatically better, which reduces vacancy time. If you can only do one thing before listing a unit, paint it.

How much should I budget for renovating a rental unit?

A solid rule of thumb is to budget 5-10% of the property's annual rental income for strategic upgrades. For a unit renting at $1,400/month ($16,800/year), that's $840-1,680 annually. For a major turnover refresh including paint, flooring, and minor kitchen/bath updates, plan for $3,000-5,000. The key is ensuring every dollar spent can be recouped through higher rent within 18-24 months.

Should I renovate between tenants or while the unit is occupied?

Almost always between tenants. Renovating while occupied disrupts your tenant, creates liability issues, and often takes longer because you're working around someone's schedule. The only exceptions are minor upgrades a tenant specifically requests (like a smart thermostat) or urgent repairs that double as improvements. Plan your major renovations for the turnover window, and bundle multiple projects together to minimize vacancy time.

Is it worth putting luxury finishes in a rental property?

No. This is one of the most common mistakes new landlords make. High-end granite, custom cabinetry, and designer fixtures don't generate proportionally higher rent. A tenant paying $1,500/month doesn't care whether the countertop is quartz or quality laminate — they care that the kitchen looks clean, modern, and functional. Spend your money on durable, good-looking mid-range finishes and put the savings toward additional units or other improvements.

How do I track whether my renovations are actually paying off?

Track the total renovation cost, the rent before and after, vacancy duration changes, and ongoing maintenance costs. Compare the monthly rent increase against the investment to calculate your actual payback period. Using a property management platform like PropsManager makes this straightforward — you can log renovation expenses per unit, track rent changes over time, and generate reports showing which upgrades delivered the best returns across your entire portfolio.

Make Every Renovation Dollar Count

The difference between landlords who build wealth and landlords who just stay busy is simple: the wealthy ones track their numbers and invest in renovations that deliver measurable returns.

Stop guessing which upgrades are worth it. Stop over-improving units because a contractor told you it'd "really add value." Start tracking every dollar in and every dollar out, and let the data tell you where to invest.

If you're ready to take a more systematic approach to managing your rental property improvements and finances, PropsManager gives you the tools to track renovations, compare performance across units, and make smarter investment decisions.

Request a demo and see how landlords are using data — not gut feelings — to maximize their renovation ROI.