With all of the recent law changes happening at the moment including the new compliance laws, many landlords are now looking to renovate and re-invest in their portfolios to increase the asset value. So, what are the benefits of renovating a rental, and what do you do?
- It will reduce overhead costs
If a rental property shows its age, it can cost a fair bit to maintain. If maintenance is taking up too much of your time and draining your wallet, it may be time to consider doing a larger-scale renovation to put the ad-hoc maintenance to rest. Upgrading old appliances with new ones can save you from a bucketload of tenant complaints when the oven stops working right before dinner. There comes a point where repairing that old oven for the 20th time is not financially viable and purchasing a new one is the best financial choice.
2. You will attract different residents
Quality residents can at times be like hens teeth; if you get good ones, you don’t want to lose them. When you renovate your property, depending on the level of investment, you may see a weekly rent increase of between $100 – $300 per week; this will shift your property from one pricing band to a higher one. With the big influx of recent new builds on the market, residents expect modern and new, not old and dated. Quality properties attract quality tenants.
3. What do you renovate and how much do you spend?
What you renovate really comes down to who your target resident is. Check out what sort of people are looking at properties in that same area. Here is a handy table of some common things residents look for:
|Students/ Group flat
|3+ Bedrooms· More than 1 bathroom/ toilet is a must
|Large bathroom – full bath
|Low maintenance section/ no section
|Low maintenance section
|Large enclosed or fenced section
|Close to city/ transport links
|Large living area
|Close to schools – Quiet streets
|Attractive living areas
|Outdoor entertaining/ large deck
|Small section/ garden
|Close to transport links/ shops
|Security/ alarm/ fencing
|Ability to have pets
|Attractive/modern interiors – easy care
|Robust interiors – don’t cheap out on quality
|Ability to have pets
|Lots of storage space
Off street parking /garaging
- What are the risks, and what do I need to consider?
Over-Capitalisation: Do not over-capitalise; renovations need to be in line with the property value and the limits within your property’s area. Do not improve beyond its resale value.
Budget: Make sure you budget, do not spend more than you can afford, and you do not want to put undue financial pressure on yourself when doing a renovation.
Future Proofing: When picking finishings and appliances, ensure you are picking modern ones. You want stuff that, in 10 years, will still look good. Also, ensure you select trusted brands with a reputation for quality. This will decrease the chances of your residents having headaches with things breaking or not being reliable. Happy resident = Easy land-lording.
How can Tommy’s help ?
Tommy’s works with clients to improve their assets. We offer an exclusive service to all of our owners, Tommy’s Transformations.
This service takes all the hard work away from you, the owner. We arrange it all. With our large network of skilled tradespeople and fantastic payment options we can help you reach your renovation goals.
Check out some of the work we have done so far here: