Residential construction in Boise, Idaho, has undergone significant transformations over the past decade. The population has seen remarkable growth, and the industry has experienced substantial shifts, partly due to the COVID-19 pandemic.
While inflation has improved since the pandemic, building and labor costs continue to rise. Any repairs or remodels people are considering today will most likely be more expensive in the next 6 to 12 months. Although the future is uncertain, this trend has persisted over the past several years.
Key Considerations for Improving Rental Properties
If you are thinking about improving a rental property, there are critical elements to consider. First, focus on repairs that are related to reducing expenses. Second, consider repairs or upgrades that are aimed at improving rents.
Reduce Expenses: Maintenance and Mechanical Upgrades
Upgrading many of your mechanical systems, such as the furnace, air conditioner, and water heater, will have virtually no impact on your rental income. However, these upgrades can significantly affect future expenses by preventing costly repairs and improving energy efficiency. The best thing you can do is set up a regular maintenance system tailored to your house’s specific needs. Routine tasks like changing HVAC filters, cleaning gutters, and flushing out water heaters are essential for extending the longevity of your mechanicals.
Improving Rents: Cosmetic Upgrades
Typically, upgrades to your rentals, such as countertops, backsplashes, appliances, door hardware, plumbing trim, paint, flooring, and lighting fixtures, are aimed at improving the cosmetic appeal of your property. Prioritizing the biggest bang for your buck can be tricky, but I recommend starting with paint, door and cabinet hardware, lighting fixtures, plumbing fixtures, and flooring, in that order.
Recommendations for Improving Your Home
When planning improvements, it is crucial to focus on your goals. Consider how long you plan to hold the property, as this will help determine the types of items to install. For instance, if you plan to keep the property for many years, investing in durable, high-quality materials may be worthwhile. Conversely, if you intend to sell the property soon, more cost-effective upgrades may be sufficient.
Additionally, assess the neighborhood rental market. Every neighborhood has a cap on rental prices, so it is important to avoid overbuilding and overspending for your area. Researching comparable properties and understanding the market can help you make informed decisions about which upgrades will provide the best return on investment.
Flooring Options for Rentals
For rental properties, there are some excellent LVP (Luxury Vinyl Plank) and laminate flooring products that are virtually indistinguishable from hardwood. These products offer a wide range of designs, including options that mimic the appearance of real wood. Additionally, they are available at various price points, making it easy to find attractive and budget-friendly options.
LVP and laminate flooring products also boast impressive durability and water resistance, making them ideal for high-traffic areas and properties with tenants. By choosing these materials, you can enhance the overall aesthetic of your rental property while ensuring it remains practical and easy to maintain.
Smart Home Features
Incorporating smart home features into your rental property can also enhance its appeal. Smart thermostats, keyless entry systems, and security cameras can provide added convenience and security for tenants and homeowners alike. These features can also help differentiate your property from others on the market and justify higher rental prices.
Fix Up Older Home or Build New Construction
At some point, there may be a conversation about tearing down an older home and building a new one. Typically, remodels cost more per square foot than building a new home due to the added labor and complexity of working with an existing structure. Starting from the ground up is straightforward and typically requires less time for comparable results. For example, a 500 sq ft addition that includes a primary ensuite as well as changing the layout and upgrading the kitchen can easily cost $300,000, even when trying to keep the budget economical. Building a brand-new home can cost anywhere from $200 to $300 per sq ft. Generally, the smaller the home, the higher the price per square foot, as building a home still has minimum requirements like a kitchen and bathrooms, regardless of whether it is 1,000 sq ft or 2,000 sq ft.
Accessory Dwelling Units (ADUs)
Many people consider adding another unit, commonly called a casita, mother-in-law suite, or ADU. These can vary significantly, from being a simple bedroom to a full tiny home that includes a kitchen, laundry, and full bathroom. Some people prefer a custom ADU, while others choose prefabricated shipping container homes to reduce overall costs. While some pre-fabricated homes advertise prices as low as $50,000, this typically doesn’t include foundation, plumbing hookup, electrical hookup, grading, etc., which can add up to $100,000 or so in costs. Overall, they still end up costing less than custom builds, but it’s important to calculate the total cost and compare that to potential rents and appreciation values to your home.
Conclusion
In summary, residential construction in Boise, Idaho, has seen significant changes over the past decade, driven by population growth and the impacts of the COVID-19 pandemic. As building and labor costs continue to rise, it is essential for property owners to make strategic decisions about repairs and upgrades. By focusing on maintenance, cosmetic improvements, energy-efficient upgrades, and smart home features, you can enhance the value and appeal of your rental property.
Planning and prioritizing your improvements based on your goals and the local rental market will help ensure that your investments pay off in the long run. With careful consideration and smart choices, you can successfully navigate the evolving landscape of residential construction in Boise, Idaho.
Thanks to Wally at American Bison for this guest post.
For more on American Bison Construction and the great work they do, visit their website at https://ambison.com.