Renting a home has become a very popular alternative among those who want profitability in the medium or long term. We, at Tecnic Project, we are dedicated to making comprehensive reforms in Mallorca and we have seen firsthand how a good remodeling project can make a difference in finding tenants and in income stability.
In this guide we share some key recommendations that arise from our experience. The aim is to help you assess whether renovating to rent out fits with what you are looking for and, if so, to have a roadmap to plan your investment with greater peace of mind.
Is it a good idea to renovate to rent?
Renovation with a view to renting is a proposal that attracts the attention of property owners who want to take a step forward in the real estate market. However, it is not always easy to know whether it is worth spending on works and updating a flat before putting it up for rent. In our experience, we have seen cases in which this bet bore very positive results, and others in which the return was slower than expected.
For this reason, it is worth considering your particular situation. Perhaps your apartment already has a natural charm and only needs some tweaking, or it may require a more profound change to meet the demands of the market. Also consider the profile of tenant you want to attract: if you are looking for someone willing to pay a higher amount, you should make sure that the property is adapted to higher expectations in aspects such as aesthetics and functionality.
What are the advantages and disadvantages of renovating a flat to rent?
Below we present some points that we believe are necessary to better understand what it means to renovate for rent. Our comments come from the experience of owners who have trusted us for this type of renovation.
Advantages
- Demand for higher quality tenants will increase
An apartment that offers comfort and a nice design attracts people willing to pay a little more. They also tend to take care of the property, as they find a place that makes them feel at ease. - Increase in property value
It's not just about a higher rental price. If you ever decide to sell, a well-maintained apartment with recent renovations has an impact on the appraisal. On more than one occasion, we have seen how the market value improved after a complete renovation. - Tax benefits
Depending on the regulations in each place, there may be tax deductions or aid for housing works. This alleviates the financial burden of the project and, with the right advice, it is possible to reduce the final investment.
Disadvantages
- The initial investment can be high
Starting a renovation involves an outlay that is not always easy to assume. It is advisable to have a budget and a cushion for unforeseen events. One of the most common problems is discovering structural damage or installations in poor condition when the renovation is already underway. - The time of the work
Every month of work means a delay in collecting rent, because the apartment is empty. Therefore, it is recommended to plan the deadlines well and coordinate the different professionals involved. Although a small delay cannot always be avoided, good organisation helps to keep it within reasonable limits. - The return on investment is long term
Unlike other types of financial transactions, home renovation does not usually generate quick profits. If your goal is to sell the apartment quickly or recover the money in a matter of months, this may not be the best option. Renovated rentals are designed for those seeking economic stability with a multi-year perspective.
What is the benefit of renovating to rent? Benefits for the owner
For many homeowners, seeing a monthly income is the main incentive, but there are other reasons that explain why renovating can help them feel more calm and secure.
- Consistent monthly income
By having a flat in optimal condition, the chances of finding tenants quickly increase. This means that the cash flow arrives continuously, which is very attractive if you have other fixed expenses. - Tax advantages
Certain types of renovations benefit from lower VAT rates or deductions that allow the investment to be cushioned. This depends greatly on the legislation and the autonomous community, so it is advisable to have an advisor who is familiar with these matters. - Savings on maintenance
Investing in new plumbing, updated electrical systems, and durable materials will save you money in the long run. Plumbing or wiring problems can be costly, and it's best to prevent them in the first place. - Improving competitiveness
The rental market can be very competitive, especially in areas with high demand. A newly renovated apartment inspires confidence and usually attracts tenants in shorter periods.
Key aspects to consider when renovating to rent
Our experience tells us that the success of a renovation depends on a combination of factors. Below we show some of the most frequently repeated ones.
Housing Assessment and Planning
The first step is to carry out a thorough examination of the flat. We want to find out which parts need urgent replacement and which aesthetic aspects can be modified to modernise it. A poorly done assessment leads to unrealistic budgets and impossible deadlines to meet. It is better to invest some initial time in assessing everything in detail, from the state of the electrical installation to the paint that will be used.
Design and space optimization strategies
In most renovations, reorganizing the layout can be the key to gaining spaciousness and light. Sometimes, knocking down a partition or integrating the kitchen with the living room can create a more practical environment. It is also interesting to think about hidden storage solutions or installing built-in wardrobes, especially if the apartment is small and every square meter counts.
For the colour palette, we suggest light and neutral tones, because they enhance the light and appeal to a wide spectrum of tenants. It is not about creating a cold atmosphere, but rather about seeking simplicity that each person can then personalise with their own tastes.
Selection of materials and finishes
In our opinion, it is worth investing in resistant floors and paints that prevent the appearance of damp. If, in addition, sustainable materials can be integrated, an extra value is added to the whole. For example, bamboo or certain paints free of chemicals contribute to a healthy environment and are a highly valued plus today. Although the investment is a little higher at first, it pays off by avoiding recurring repairs and maintenance.
Fiscal and financial aspects: VAT and subsidies for renovations for rent
When considering the profitability of renovating a flat, one should not forget the possible tax benefits. There are opportunities related to VAT or tax deductions, depending on the type of work and the autonomous community. Sometimes, specific subsidies are also announced for those who renovate their homes for rental purposes.
Tax treatment for renovations to rental properties
We recommend that you consult with a tax advisor. Documenting each expense, keeping invoices and proving that the apartment is actually used for rent is essential. An error in the management of these procedures can lead to the loss of economic advantages, so it is preferable to be cautious and keep everything well organized.
At Tecnic Project we are specialists in Comprehensive Renovations in Mallorca
At Tecnic Project, your company of renovations in Mallorca, we carry out comprehensive reforms in Mallorca and we are passionate about creating spaces that combine comfort, style and durability. If you are thinking of renovating your rental property, we would love to hear your ideas and accompany you in this process.
Our philosophy is based on personal contact and finding solutions that meet the needs of each owner. We believe that each home has its own personality and deserves a well-prepared project that ensures favorable results.
If you would like to turn your apartment into a welcoming home for future tenants, contact us. We will answer your questions and design a plan according to your budget and expectations. We will be happy to help you achieve a stable income and a more attractive property for the market!
