Remember the first rental house you lived in? The one with mouldy bathrooms, giant taps installed over tiny sinks and threadbare carpet? It’s probable that your landlord didn’t think much about you and vice versa. Were they a savvy investor, however, they might have considered taking more care of their investment.
With tenants’ expectations rising all the time, if you don’t keep your investment in great condition it may be a struggle to find good people to live in your property. If you’re considering an overhaul, the most important point to consider is to know your market and budget accordingly. A good starting point is to look at what freshly renovated properties sell for versus unrenovated properties. Can you make money from this? If you think you can do the reno and still sell for a profit (or command a higher rent) it could be worth your time and effort.
Talk to your property manager and get a recommendation on what renovations are worthwhile – they can also give you information on what the likely increased rental and sales would be.
While it’s sometime cheaper to call in the builders rather than do a ‘quickie’ job yourself, not every renovation has to be a dramatic and costly change. Smaller upgrades such as painting, carpets and blinds can make a difference; sourcing new door handles on eBay, painting splashbacks and buying inexpensive light fittings can cost next to nothing, yet look great and potentially add thousands to the final value of the property.
It’s a tricky job to get the right balance between a reno that looks good yet doesn’t cost you too much. Bathrooms and kitchens are usually the most expensive part of the reno, yet are the areas that generally sell a property. A renovation on a valuable investment needs a professional standard of work and to meet all building and safety requirements – particularly for plumbing and electrical work. This is one area where it’s worth calling in the tradies.
Talk to theowners corporation
While it is good to renovate your apartment, to increase rental and sale prices the building itself must also be well presented and maintained. If you ensure the owners corporation is doing its job and the building is well maintained, all these issues should be fairly straightforward.
Keep your receipts
There are some significant taxation benefits through depreciation. Keeping all your receipts for the reno (from plumbing to skip fees, petrol, mobile bills, consultant fees and more), as well as your ongoing costs (general maintenance and repairs) can be claimed as a deduction. The cost of the renovation can also be depreciated for taxation purposes and offset against future rental.
A quality renovation doesn’t have to cost the earth, yet it can add capital value far beyond the cost. You can earn a higher rental per month and attract better quality tenants who will take care of your investment for years to come.