Budget-friendly renovations could have a big impact on your investment returns
The types of renovations that can deliver the right outcomes for an investment property may be different from an owner-occupied home. Doing renovations may help you earn a higher rent or increase your property’s value.
You can make improvements based on your needs or lifestyle of your own home. But a renovation project involving a rental property is different. Ideally, improvements should mean a higher rent, stronger tenant appeal or an uptick in the property’s value. So, think carefully about the types of renovations that tick one or all of these boxes.
Renovations don’t have to be major to have a big impact on your returns. Check out these simple ideas for budget-friendly renovations with the potential to add value and tenant appeal.
These can sometimes be two of the most expensive rooms to renovate. But you don’t have to re-arrange the plumbing or spend a fortune on tiles to make a difference.
Freshen up your bathroom by painting outdated tiles with specialist tile paint, re-grouting and adding a new shower curtain. Give a tired bathroom a new lease of life with modern tap fittings or a low-flow showerhead.
A budget-friendly kitchen makeover can include repainting or replacing cupboard doors. Also think about replacing old handles and adding a splashback. A day’s work could lead to a handy uptick in weekly rent.
It could be a good idea to invest in secure fencing if you’re happy to make your rental place available to pet owners. Adding side entrance gates to the back garden may also appeal.
If you’re worried about wear and tear, consider adding a clause to the lease that says tenants may have to pay for carpet cleaning or other pet-related costs at the end of the lease.
Extra storage comes in handy. Budget-friendly shops like IKEA or Bunnings offer affordable storage solutions. It could be a great way to boost your property’s value.
The key is making improvements that appeal to tenants. Your property manager or local real estate agent can offer tips about simple renovations you can do to earn a higher return on your investment.
Simple cosmetic renovations could also improve your rental property’s appeal. A fresh coat of paint can brighten interiors and improve street appeal. Polishing timber floorboards may give an older home a more contemporary feel.
By law, landlords have to provide a safe and secure property. Improvements should be done with this in mind. Requirements vary by state. But adding smoke alarms, replacing broken fencing and installing window locks are affordable improvements that keep tenants safe.
Not all renovations have to be expensive or structural. For instance, rising power costs may mean tenants prefer energy-efficient properties. So, when you’re replacing appliances look for ones with a high energy rating that could help save on energy bills. Low-cost renovations like installing ceiling fans may also make a difference by increasing cross ventilation and air flow.
Overcapitalising happens when you spend more on renovations than they add to your property’s value. It can sometimes be a costly mistake.
You might assume adding an extra bedroom may mean earning a higher rent. But that’s not always the case. A different approach could be to focus on features that tenants prefer. These can include off-street parking, storage, security and quality appliances. So, adding a carport could add more value than putting a spa in the bathroom.
It’s possible to keep your renovation on track with some background research. Know the sort of tenant your property will attract and understand what’s likely to appeal. The last thing you need is to renovate your investment property to the point where residents can’t afford the rent.
Speak to an Aussie Broker who can help you understand your financing options if you’re looking to renovate your investment property.