Hard Money Loan Cover the Renovation

If you truly want to maximize your rental income as a landlord, consider increasing your property’s value by performing renovations. Of course, you don’t need to spend money on the latest gadgets and trends. Instead, you’ll get the best results by focusing on home improvements worth the price tag.

Even renovations with the highest ROI are costly. So it’s crucial to figure out an effective mode of financing to pay off your remodeling projects. That brings us to the question, can a hard money loan cover the renovation costs of a rental property? And what upgrades can boost your rental’s ROI? We’ve got you covered. Stick around till the end of this article to find out.

Can Hard Money Loan Cover the Renovation Costs of a Rental Property? 

A hard money loan is a short-term private loan backed by collateral the borrower provides. They’re also known as non-conforming loans because conventional lenders like banks don’t offer such financing options. Instead, private individuals or companies are happy to approve a hard money loan at a higher interest rate than banks typically provide. Despite the higher cost, the benefit of opting for a hard money loan includes speed, flexible negotiation, and a higher chance of approval.

However, even with all these perks getting a hard money loan is not the best choice for all investors. Most experts recommend using it to flip a house because such projects allow you to recoup enough cash to offset your short-term loan. Since house flipping involves rehabilitating dilapidated properties, spending some of your capital on remodeling projects with a high ROI makes sense. Hard money lenders in Baltimore can discuss how this type of loan can help in the renovation, especially since many lenders would be willing to finance you based on your ARV (after repair value).

In summary, yes, a hard money loan can cover the renovation costs of a rental property. You have to draw up a feasible schedule and a clear idea of how much funding your remodeling projects need. Clarity on these two points will make it easier to convince a lender to back you financially amidst the multiple applications on their desk.

Top 5 Renovations that Boost ROI in a Rental

Hard Money Loan Cover the Renovation1

  • Upgrade Your Interior Lighting 

Learning to qualify for a hard money loan is only part of the equation. Knowing which renovations can boost the ROI of your rental, so you meet your scheduled payments is the other half. If you’re strapped for cash, upgrading your lighting is one of the most affordable renovation projects with a high ROI. Proper lighting improves the aesthetics of your home, making it seem cozier and more family-friendly. It can also reduce your utility cost by opting for more energy-efficient options.

  • Do a Minor Bathroom Update 

A minor bathroom update could make a world of difference in making your home more appealing. Adding modern touches like a newer showerhead or faucet can elevate the outlook and make your bathroom appear less dated. Opting for a more contemporary vanity can also lift the room, adding a sense of luxury. Besides, prospective tenants or buyers would be okay paying an extra fee to enjoy such benefits. After all, who doesn’t love an Instagram-ready bathroom?

  • Modernize Your Kitchen 

Another excellent place to boost your property’s value is the kitchen. A more modern kitchen is highly coveted in the real estate scene, and houses with such perks are worth top dollar on the market. Adding or changing a few of your appliances can make the kitchen look classier. However, you don’t have to break the bank by buying the latest coffee maker or dishwasher. Minor updates like a new countertop, a fresh backsplash, and modern cabinet hardware can also give you more property appeal.

  • Apply a Fresh Coat of Paint

Applying a fresh coat of paint can go a long way in making your house look brand new. Painting your exterior would improve curb appeal, making your home look like the best on the block. Besides the aesthetic value, quality exterior paint can also serve as a protective border for your house against harsh elements like wind and snow. Thus, you can prevent repairs like replacing rotting wood or dealing with mold in the long run. Selecting the right colors for your interior can also create feelings of warmth, calm, or serenity, depending on your choice.

  • Change Your Flooring

Finally, brand-new floors are one of the best remodeling options for a high return. One of the easiest ways to spot an old house is from its creaking boards, worn carpets, or faded tiles. Investing in better floors would be a significant investment that helps you attract prospective tenants or sell your home faster.


Hard money loans are a fast and flexible financing option for borrowers, and they’re ideal for renovations, especially if you’re flipping a property. With the right plans, you could turn a reasonable profit primarily if you invest in the top renovations that boost your property’s ROI.

Do you need some help? Feel free to contact a professional property management company that can see you through every step of being a property owner and help you maximize your returns.