Top 15 renovations property managers can perform to increase ROI

As a property manager, one of your primary goals is to maximize the ROI of the properties you manage for your owners—or for your own investment properties. Renovations can play an important role by attracting high-quality tenants from the more than 44 million households that rent, reducing vacancy rates, lowering replacement costs, and allowing for higher rental rates.

Here are the top 15 renovations that can boost the ROI of rental properties, including insights from the 2026 State of the Property Management Industry Report.

1. Green Renovations

Sustainability is becoming table stakes when it comes to renovation. With U.S. households collectively spend $230 billion on home energy annually, green renovations that reduce utility costs are not only attractive to environmentally conscious tenants but can also be a major financial selling point. Consider installing energy-efficient windows, LED lighting, and low-flow water fixtures. Solar panels are another investment that could reduce electricity costs and even generate income through energy credits.

2. In-Unit Laundry

According to our Industry Report, one of the top amenities renters look for is in-unit laundry. This convenience can be a game-changer, especially in rural areas where laundromats are less accessible. Installing a washer and dryer in each unit can justify a higher rent and attract long-term tenants who value this convenience.

3. Modern Kitchens

The kitchen is often the heart of the home, and a modern, well-equipped kitchen can increase a property’s appeal significantly. Consider updating countertops to granite or quartz, installing stainless steel appliances, and adding a stylish backsplash. These upgrades not only enhance the aesthetic appeal but also improve functionality, making the property more attractive to potential tenants.

4. Smart Home Technology

Incorporating smart home technology can set your property apart from the competition. Features like smart thermostats, keyless entry, and smart lighting systems not only provide convenience but also improve energy efficiency and lower energy bills. Tenants are increasingly looking for these modern amenities, and they can justify higher rental rates, especially when attracting new residents.

5. Outdoor Spaces

This is another of the top-requested amenities from the Industry Report. Outdoor spaces are highly desirable, especially in urban areas where space is at a premium. Consider adding or upgrading patios, balconies, or communal gardens. Providing outdoor furniture, grills, and even fire pits can create inviting spaces for tenants to relax and socialize, enhancing the property’s appeal.

6. Storage Solutions

Ample storage is a big selling point for rental properties. Built-in closets, shelving units, and basement storage spaces can make a property more functional and attractive. Tenants appreciate having enough space to store their belongings, which can lead to higher satisfaction and longer tenures; interestingly, for tenants who have lived in the same unit for five or more years, over half transition to month-to-month leases.

7. Flooring Upgrades

Old, worn-out flooring can be a major turn-off for potential tenants. Upgrading to durable, easy-to-clean flooring options like hardwood, laminate, or luxury vinyl can make a big difference. These materials not only look great. They stand up to wear and tear, reducing maintenance costs in the long run.

8. Fresh Paint and Finishes

A fresh coat of paint can do wonders for a rental property’s appearance. Opt for neutral colors that appeal to a wide range of tenants. Additionally, updating finishes like door handles, light fixtures, and cabinet hardware can give the property a modern, cohesive look without breaking the bank.

9. Enhanced Security Features

Safety is a top priority for tenants, and according to the Industry Report, enhanced security features can make a property more attractive. Consider installing security cameras, better lighting in common areas, and secure entry systems. These upgrades not only provide peace of mind for tenants but add value to the property, too.

10. Pet-Friendly Features

Many renters have pets, and pet-friendly features can make your property stand out. Consider adding pet amenities like a dog park, pet washing station, or pet-friendly flooring. These features can attract a broader range of tenants and increase occupancy rates.

11. Energy-Efficient Windows

Replacing old windows with energy-efficient ones can significantly reduce heating and cooling costs. This not only makes the property more attractive to tenants but also lowers utility bills, which can be a selling point for potential renters.

12. Open Floor Plans

Open floor plans are highly desirable. They create the illusion of a larger space and allow for flexible living arrangements. Consider removing non-structural walls to create a more open, airy feel. This renovation can make the property more appealing to a broader range of tenants.

13. Fitness Facilities

On-site fitness facilities are a top amenity for many renters, according to the Industry Report. If space allows, consider adding a gym or fitness center with modern equipment. This can be a significant draw for health-conscious tenants and justify higher rental rates.

14. Community Spaces

Creating communal spaces where tenants can gather and socialize can enhance the sense of community within your property. Consider adding a lounge area, game room, or co-working space. These amenities can improve tenant satisfaction and retention rates.

15. Sound-Proofed Walls

No one wants to hear their neighbor’s TV late at night, or their dog barking early in the morning. On the flip side, no renter wants to tip-toe around their apartment for fear of disturbing the neighbors. Sound-proofed walls, one of the top amenities from our Industry Report, give tenants the peace of mind.

Understanding Renovation ROI and Budgeting

The highest ROI renovations for rental properties focus on kitchens, bathrooms, and tenant-demanded amenities like in-unit laundry and outdoor spaces. These renovations typically return 70-100% of their cost through higher rent and reduced vacancy rates.

When budgeting for renovations, use the 30% rule as a guideline—don’t spend more than 30% of a property’s value on a single space. The goal is to make smart financial choices that attract quality tenants and increase property value for owners.

Tax Considerations for Property Renovations

Understanding the tax implications of renovations helps you plan financially:

• Repairs: Fixing leaks, painting, or routine maintenance can often be deducted in the same year
• Improvements: Kitchen remodels, bathroom additions, or major upgrades are typically depreciated over several years, and it’s important to be aware of changes to tax law.

Speak with a tax professional for specific guidance on your situation.

How to Prioritize Renovations for Maximum Impact

With a limited budget, prioritize renovations using this framework:

1. Safety first: Address electrical issues, roof leaks, and other safety concerns
2. High-impact areas: Focus on kitchens and bathrooms that tenants notice most
3. Market competitive features: Add amenities that other properties in your area offer. Use the 30% rule to avoid overspending

This approach helps you make strategic decisions that align with your budget and market demands.

If you looking for more insights on how to succeed in property management, check out the full Industry Report to learn about market trends, owner and renter insights, and property managers’ goals for 2026.

Ready to bring on a software solution to help you manage your renovations? Check out Buildium’s free 14-day trial, no credit card required, or schedule a demo.

Frequently Asked Questions About Rental Property Renovations

Can I write off renovations on my rental property?

Minor renovations count as repairs and can be deducted immediately, while major improvements must be depreciated over time.

What is the 30% rule for renovations?

The 30% rule is a general budgeting guideline suggesting you should not spend more than 30% of a property’s value on remodeling a single space. For example, for a property valued at $300,000, the budget for a kitchen remodel would be around $90,000.

What is the 2% rule for rental property?

The 2% rule is a guideline used to evaluate a potential investment. It suggests that the monthly rent should be at least 2% of the property’s purchase price to be a worthwhile investment. For a $200,000 property, this would mean a monthly rent of at least $4,000.

How do I calculate the ROI on a rental property renovation?

ROI = (Annual rent increase ÷ Renovation cost) × 100. For example: $1,200 annual rent increase ÷ $10,000 renovation cost = 12% ROI.

What’s the difference between repairs and renovations for tax purposes?

Repairs maintain current condition and are expensed immediately, while renovations add value and are depreciated over time.