Renovating a rental property presents a number of questions for property owners and investors.
The ultimate goal is to maximise the property’s rental return by increasing its appeal among renters. And so, it’s important that you work out which renovations will yield strong long-term returns, and which aren’t worth the time, effort and money.
Painting, air conditioning and dishwashers are among the renovations that should be on your hit list when renovating a rental, and here’s why.
Giving a property’s interior a coat of paint is the oldest trick in the book when it comes to boosting a property’s price at auction. And it’s a similar story for rentals.
Freshening up the walls might cost you a few hundred dollars, but it’s guaranteed to deliver more interest at open for inspections, and will almost certainly pay for itself through increased rent. A $10 per week increase in rental return will pay for the paint job within 12 months; $20 a week and you’re in the black within six.
Mint Property Management director Megan Stuart says it’s always best to go with light, neutral colours, as they have much broader appeal and allow tenants to decorate the space according to their own style.
A large percentage of renters won’t even consider rental properties that don’t have air conditioning, so, if you’re renovating an older rental property that doesn’t have it, you should probably make it your first priority.
Stuart concedes, though, that some tenants are prepared to accept ceiling fans.
“If you’ve got ceiling fans and you can demonstrate good cross-breeze, people will accept it if, for example, [it means they can live within] 500m of a train station,” she says.
Many older properties don’t have dishwashers, but, in this day and age, they’re must-haves, and most tenants will expect one.
Whatever you spend on the appliance will be worth it, as not having one will likely reduce the maximum rent prospective renters are prepared to pay to live there.
“The way that we live, dishwashers are a given,” Stuart says.
Unless you’re planning to sell your investment property in the near future, or the rooms are incredibly dated or rundown, you probably don’t need a full overhaul in the kitchen and bathroom.
But a few light touches will give the spaces a major lift, and are often enough to convince renters that this is the house for them.
For example, painting your benchtops or putting in a new splashback may be money well spent in the kitchen, while a new vanity or fresh shower screen might be all your bathroom needs.
Again, keep the upgrades neutral and avoid polarising statement pieces, as you won’t be living in the property, your tenants will be.
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