When renovating your investment property, all changes should be made with the market and potential tenants in mind, rather than personal preferences.
The priority for any renovations should be areas that need repairs, are due for maintenance, or might be worth replacing entirely. Then it’s time to consider what else could be improved beyond standard repairs and maintenance.
Additions and upgrades that tend to see the best return on investment, in terms of both rental and resale value, include:
- Additional bedrooms,
- Improvements to bathrooms (or the addition of an ensuite),
- Kitchen upgrades,
- Additional parking spaces,
- Upgraded flooring, surfaces and windows,
- Air-conditioners and/or ceiling fans,
- Aesthetic improvements like updated fixtures and fittings and a fresh coat of paint.
We recently guided an owner through renovations of their four-bedroom, two-bathroom house.
Rent: $330/week Rent: $420/week
Sales appraisal value: Sales appraisal value:
The renovations equated to $4,680 additional annual income and 9.78% ROI on the cost of the improvements (just under $48,000, inclusive of fees and vacancy).
The works focused mainly on key areas like bathrooms, kitchen and flooring, as well as small but effective upgrades throughout the property.
- Repaired both leaking showers and replaced both shower screens,
- Resurfaced cracked and flaking bathtub ($429 with five-year warranty vs. $2,500 to replace bath entirely),
- Replaced vanity in ensuite,
- Installed IXL Tastics (light, heat and vent systems) in both bathrooms.
- Replaced oven/stove unit and rangehood,
- Added dishwasher,
- Replaced cupboard handles and benchtops.
FITTINGS AND FIXTURES
- Installed ceiling fans,
- Replaced blinds,
- Replaced taps, handles and light fittings.
- Replaced carpet with vinyl planks in the living area, kitchen and hallway (plank vinyl has a 15-year life expectancy, whereas sheet vinyl lasts about five years),
- Replaced carpet to bedrooms.
- Repainted internally and externally,
- Added remote access to both garage doors,
- Added a pergola,
- Significant clean-up of yard and gardens.
Leah Jay charges 5.5% (inc GST) of the total cost of property improvements for facilitation. If you’re interested in discussing potential renovations to improve your property’s return on investment, talk with our Investment Services team or your property manager.