Understanding your market
You should approach an investment property renovation differently to a renovation on your own home.
Firstly, you should make sure you know the rental market in your property’s area and budget accordingly. Look at the rental prices of both renovated and unrenovated properties to try and ascertain whether the difference is big enough to warrant the effort of a renovation.
How long will it take you to make back that money? Just say your renovations will earn you an extra $50 in rent per week, that’s an extra $2,600 over the year. If you spend $5,000 on your renovations, it will take you two years to make back this money. If you can renovate and still extract value then it’s likely to be worth it - provided the costs don’t spiral out of control.
The little things count big time
Rather than any major overhauls, it’s little improvements that can make the biggest impact. Keep things as low-cost as possible and invest in mid-range, quality materials durable enough to withstand heavy-footed tenants.
By spending just $5,000 on simple renovations you can fetch up to 20% more rent for your property. There are those cheap and cheerful improvements that can make a huge difference for pretty minimal effort.
Here are some low-cost ideas you might want to consider:
• Paint the walls
TIP: Stick to neutral colours with universal appeal e.g. off-white or ecru.
• Install blinds or shutters
TIP: Choose classic wooden blinds or plantation shutters. Buy them off-shelf and cut them down to size.
• Install new light fittings
TIP: Get rid of old light fittings and replace with modern ones e.g. downlights.
• Replace cupboard handles
TIP: Replace internal and cupboard door handles with brushed stainless steel ones.
• Lay new flooring
TIP: Lay cost-effective, durable flooring e.g. carpet or laminate.
• Re-grout tiles in bathroom
TIP: Get rid of cracked or mildewed grout to freshen up your bathroom.
• Garden maintenance
TIP: Maximise your home’s street appeal by weeding garden beds, re-planting and repairing/painting front fence.
Sourcing materials for your renovation
The less money you spend on renovating your investment property, the better. Fixtures and fittings (and their installation) typically make up 50 percent of the total cost of your renovation, so by sourcing cheaper materials online you can dramatically cut your overall spend.
To cut costs you should shop around for materials. Ask friends and family who have done recent renovations which contractors and suppliers they used.
You can also make great savings on your appliances, tiles, sinks, taps and even bench tops by shopping online at auction sites such as eBay and Grays Online.
When renovating your investment, cost everything you plan to do, work out the final rental value of the property and check to see if it is a viable proposition. If it is, then stick to your plan as closely as you can. If you have to overspend in one area, then trim back in another.