Rental Renovations: 22 Budget Upgrades That Pay Off

Renovating a rental isn't the same as renovating your own home. In your own home, you can have the shag carpet in the bathroom you've always wanted (no judgment). In a rental, every dollar you spend should help the home rent faster, earn more, or cost less to keep up, and the shag carpet does none of those. Put the shag down.

This guide covers how to decide which projects are worth it, the rules to check before you start, 22 budget-friendly upgrades (including the best flooring, paint, and countertops for a rental), when to do the work yourself, and how renovation costs are treated at tax time. It's general information, not tax or legal advice. If this is your first rental, our guide to renting out your house covers the rest of the process.

Rental renovations at a glance

• Spend where renters notice and where wear shows first: paint, flooring, lighting, and kitchen and bathroom fixtures.

• Pick durable, neutral finishes: luxury vinyl plank or tile floors, one light neutral paint color in an eggshell or satin finish, and laminate or quartz counters.

• Check the payback. Divide the cost of an upgrade by the extra monthly rent it brings in to see how many months it takes to pay for itself.

• Check the rules first: permits for electrical, plumbing, or structural work, lead-safe rules for homes built before 1978, and notice requirements if a tenant lives there.

• Repairs and improvements are taxed differently. A repair is usually deducted in the year you pay for it; an improvement is usually depreciated over several years.

Why renovate a rental property?

• Keep it rentable. A rental has to be safe, meet local codes, and be comfortable to live in. If yours isn't there yet, that comes before any cosmetic project.

• Earn more rent. Some upgrades, such as in-unit laundry or a refreshed kitchen, let you charge more. Others mostly help the home lease faster at the rent you already set.

• Cut ongoing costs. Durable floors, efficient fixtures, and regular servicing mean fewer repair calls and lower bills, whether you or your tenant pays the utilities.

• Keep good tenants longer. Tenants who like where they live are more likely to renew, and every renewal skips a turnover.

• Protect long-term value. Renters may not notice a new roof or a sealed foundation, but a future buyer will.

How to decide which renovations are worth it

Start with your goal. If you want to lease faster at the current rent, focus on what renters see in photos and on a tour: paint, floors, lighting, and the kitchen and bathrooms. If you want to raise the rent, compare your home with similar rentals that rent for more and look at what they have that yours doesn't. If you're planning to hold the home for years, put money into systems that keep it in good shape, like the roof, HVAC, and water heater.

Then run the numbers. To estimate an upgrade's payback, divide its cost by the extra rent it brings in each month.

Example (illustrative): adding a $1,000 washer and dryer lets you charge $40 more a month. $1,000 ÷ $40 = 25 months to pay for itself. If you expect the tenant to stay at least that long, or the next tenant to pay the higher rent too, the upgrade earns its keep.

If you list with Nomad, start with the free rent estimate for your home as it is today, so you're comparing each project's cost against a real rent number rather than a guess.

Rules to check before you start

• Permits: electrical, plumbing, structural, and roofing work, and often water heater and window replacements, usually need a permit. Check with your city or county building department before work starts.

• Lead paint in homes built before 1978: under the EPA's Renovation, Repair and Painting Rule, landlords who disturb painted surfaces in pre-1978 housing must follow lead-safe work practices and be EPA-certified or hire a certified firm, even when they do the work themselves. Small jobs that disturb 6 square feet or less of paint per room inside, or 20 square feet or less outside, are exempt, but window replacement never is. If a tenant lives there, they need the EPA's "Renovate Right" pamphlet before work begins (at least 7 days ahead if you mail it).

• Tenant notice: if the home is occupied, many states require advance notice before you or a contractor enter, often 24 to 48 hours. Large projects are easier to schedule between tenants.

• HOA rules: many HOAs require approval for exterior changes, fences, and sometimes flooring in condos.

22 budget-friendly ways to renovate your rental property

Fixtures and hardware

1. Update the light fixtures. New fixtures are a low-cost way to make a room look current. Skip anything trendy or ornate; simple fixtures look fine for years and are easy to match if one breaks.

2. Brighten the lighting. Dark rooms and basements make a poor first impression on a tour and in photos. Clean or uncover windows, trim branches that block light, and use brighter LED bulbs. If a room has no overhead light, a switched outlet for a lamp helps.

3. Replace cabinet hardware and doorknobs. Handles and knobs can cost a few dollars each and change the look of a kitchen in an afternoon. When you replace exterior doorknobs, rekey or change the locks between tenants too.

4. Replace worn faucets and showerheads. Tenants use them every day, and wear shows. A new faucet or showerhead is an inexpensive way to make a bathroom or kitchen look cared for.

5. Replace old toilets. Toilets made before 1994 can use 3.5 gallons or more per flush. A WaterSense-labeled model uses 1.28 gallons or less, which lowers the water bill for whoever pays it.

Walls, floors, and counters

6. Patch the holes. Nail holes and dents in drywall are cheap to fix with spackle or a patch kit, and they need fixing before any paint job.

7. Paint the interior. Interior paint is one of the cheapest projects that makes the biggest visual difference, and it's an easy one to do yourself.

The best paint for a rental property:

• Color: one light neutral, such as an off-white or light greige, used on every wall in every unit. It shows well in listing photos, suits any furniture, and lets you touch up a wall instead of repainting the room.

• Finish: eggshell or satin on walls, because it can be wiped clean; semi-gloss on trim, doors, and bathrooms, where moisture and scuffs are worst; flat on ceilings.

• Records: write down the brand, color name, and finish, and keep a labeled can for touch-ups.

8. Install durable flooring. Flooring isn't cheap, but worn or stained floors are one of the first things renters notice.

The best flooring for a rental property:

• Luxury vinyl plank (LVP): the most common choice for rentals. Most products are waterproof or highly water-resistant, resist scratches from pets, and cost less than hardwood. Damaged planks can often be replaced one at a time.

• Tile: very durable and a good fit for bathrooms, kitchens, and entryways, though it costs more to install and grout needs upkeep.

• Laminate: looks like wood for less, but most laminate swells if water gets into the seams, so keep it out of kitchens and bathrooms.

• Carpet: the lowest upfront cost and comfortable in bedrooms, but it stains, holds pet odors, and usually needs replacing sooner than hard flooring.

• Hardwood: appealing to renters, but it scratches and is expensive to refinish. If a home already has it, protecting it usually makes more sense than adding it.

9. Replace dated countertops. Countertops get heavy daily use, so durability matters more than looks. Laminate is the lowest-cost option and easy to replace. Quartz costs more but doesn't need sealing and resists stains and scratches. Granite is durable but needs periodic sealing. Marble and butcher block stain and scratch easily, which makes them a poor fit for most rentals.

10. Add a backsplash. A simple tile backsplash protects the wall behind the sink and stove and updates a kitchen without replacing cabinets.

Kitchen, laundry, and safety

11. Match the appliances. A mismatched set makes a kitchen look pieced together. Replacing the oldest appliance with one that matches the rest is often enough.

12. Add laundry. In-unit laundry or hookups are a feature many renters filter for when they search. Run the payback math above before you add it.

13. Check smoke and carbon monoxide alarms. Test them, replace old units, and follow your state's rules on where alarms are required. Many states and cities also require carbon monoxide alarms in homes with gas appliances or attached garages.

14. Service the HVAC and water heater. The cheapest renovation is the one you never need. Regular servicing extends the life of expensive systems and heads off emergency calls.

15. Add storage. Shelving in closets, a garage organizer, or a small shed gives renters somewhere to put their things and makes the home feel bigger.

Outside and curb appeal

16. Tidy the yard. Low-maintenance landscaping with native plants looks good with less watering and upkeep. Be clear in the lease about who handles yard care.

17. Trim trees and shrubs. Overgrown branches hide the house, block light, and can damage the roof or siding.

18. Build or repair a fence. If you allow pets, a fenced yard is a feature pet owners look for. It doesn't need to be fancy, just sturdy and tidy. Our guide to allowing pets in your rental covers the tradeoffs.

19. Add exterior lighting. Motion-sensor lights at the entry, driveway, and backyard make the home safer and more usable after dark.

20. Pressure wash the exterior. Siding, driveways, and decks look newer after a careful pressure wash. Use a low setting on wood and older siding to avoid damage.

21. Paint the exterior. Exterior paint costs more and takes longer than interior paint, but faded or peeling paint can keep renters from scheduling a tour. If the home sits empty for even a month, that lost rent can cover a good share of the job. Our guide to the rental vacancy rate explains how to estimate what a vacancy costs.

22. Choose finishes that won't date. Trendy finishes go out of style in a few years, and out of style means renovating again sooner. White or light cabinets, simple hardware, and neutral tile last longer and are easy to match.

DIY or hire a pro?

Doing the work yourself saves labor costs on simple jobs like painting, hardware, and patching. For electrical, plumbing, roofing, or anything that needs a permit, a licensed professional is usually the safer choice, and it may be required. Get at least two or three written estimates for larger projects, and don't feel rushed by a limited-time offer.

Once a contractor finishes, check the work before you pay the final invoice. If you list with Nomad, you can order a rent-ready inspection from your owner portal for $125. An inspector from Inspectify, Nomad’s inspection partner, checks that the work was done correctly before the home goes back on the market.

How Nomad handles this: With Nomad's maintenance through Lula, residents can report a problem any hour, Lula diagnoses it for free, and you decide whether to handle it yourself or send a Lula Pro. Lula's catalog lists flat-rate prices for 600+ services, so you can see what a pro would charge before deciding to do a job yourself, and repairs by a Lula Pro come with a 30-day warranty.

Renovation costs and taxes

The IRS treats rental repairs and improvements differently:

• Repairs keep the home in working order, such as fixing a leak, patching drywall, or repainting a room. You can usually deduct them in the year you pay for them.

• Improvements make the home better, restore it, or adapt it to a new use, such as a new roof, a kitchen remodel, or an added bathroom. You usually recover their cost through depreciation. Improvements to the building itself are depreciated over 27.5 years.

• Appliances, carpet, and furniture in a residential rental are 5-year property. For qualifying property acquired and placed in service after January 19, 2025, the 100% bonus depreciation allowance lets you deduct the full cost in the first year unless you elect out.

• Small purchases: if you make the de minimis safe harbor election, you can deduct items that cost $2,500 or less per invoice or item instead of depreciating them.

Our guide to rental property tax deductions covers the rest. The rules have conditions, so check your situation with a tax professional before you file.

When to renovate: between tenants

The best time for most projects is the gap between one tenant moving out and the next moving in, so you don't need to schedule around anyone. Plan the work before the current lease ends, line up contractors early, and keep the list to what you can finish in a week or two, since every extra week empty costs rent.

Turnover is also when you sort out what the outgoing tenant owes. Damage beyond normal wear and tear can be deducted from the security deposit within your state's rules; routine refresh work like repainting after a normal tenancy usually can't.

Once the work is done, take new listing photos so renters can see it. If you list with Nomad, professional photos are $189, refunded in your first month's rent. Our guide to professional rental photos explains what to expect.

Frequently asked questions

What renovations increase rent the most?

Upgrades that change how the home lives, such as in-unit laundry, an added bedroom or bathroom, or an updated kitchen, are the ones most likely to support a higher rent. They also cost the most and take the longest to pay back. Fresh paint, durable flooring, and updated lighting and fixtures cost less and mostly help the home lease faster at market rent.

How do you fix up a rental house cheaply?

Start with paint, patching, new light fixtures, cabinet hardware, faucets, and a tidy yard. Most of these cost little, can be done yourself, and change how the home looks in listing photos and on tours.

What is the best flooring for a rental property?

Luxury vinyl plank is the most common choice for rentals because most products are waterproof or highly water-resistant, resist scratches, and cost less than hardwood. Tile works well in bathrooms and kitchens. Carpet costs the least upfront but wears out and stains faster.

What is the best paint for a rental property?

A light neutral color in an eggshell or satin finish on walls, with semi-gloss on trim and in bathrooms. Use the same color in every room and every unit so touch-ups are easy.

Are rental property renovations tax deductible?

Repairs are usually deductible in the year you pay for them. Improvements are usually depreciated, over 27.5 years for the building and 5 years for appliances and carpet, though bonus depreciation and the de minimis safe harbor can let you deduct some costs right away. Check with a tax professional.

Can I renovate while a tenant lives in the rental?

Yes, for smaller projects, as long as you give the advance notice your state requires before entering and keep the home livable. Larger projects are usually easier between tenants.

Do lead paint rules apply to my rental?

If the home was built before 1978 and the work disturbs more than 6 square feet of painted surface per room inside, or 20 square feet outside, the EPA's lead-safe renovation rules apply, even if you do the work yourself. Window replacement is always covered, whatever its size. If the home is occupied, the tenant must get the EPA's "Renovate Right" pamphlet before work begins.