Who doesn’t want to get the highest possible rent for their investment property? Whether it’s a booming or lacklustre property market, whether you have a tiny studio in the heart of Sydney or a three-bedroom house in the outer suburbs, look for quick and easy improvements that can justify a modest rent rise.
Know what kind of improvements are going to have maximum appeal to the type of tenant you want to attract. For example, is your property in a suburb with high demand for student accommodation? If so, you’d be wasting money on top-of-the-line finishes like stone benchtops for a kitchen update, when a tough laminate one will serve just fine. Probably more valued would be some kind of shaded outdoor area they could use. In an area popular with professionals, conveniences like a dishwasher and internal laundry would be prized.
Plan ahead of time, get in between tenancies, and be ready to start work the minute the place becomes vacant. That may mean teeing up access for tradies ahead of the tenant moving out, so you can get quotes done. Have any fixtures and fittings ready to go.
While the place is empty of furniture, it’s easy to get in and paint throughout, which always freshens up a place and increases its appeal. Just be sure to use quality paint that will withstand maximum wear and tear.
Possibly even rip up any grotty carpets and think about new flooring… a floating floor, or maybe even polishing the floorboards, if that’s feasible.
Does the place look gloomy? That’s always a turn-off. Updating the lighting, and even something as straightforward as getting the correct bulb for the room (think a bright white instead of warm white globe for maximum light in most areas), can make the world of difference. Would some ceiling fans help alleviate the summer heat?
As an example of how effective a targeted cosmetic update can be in getting a swift uplift in value, I spent around $5500 updating a two-bedroom apartment in inner Sydney last year. We were in and out in five days, doing most of the tick list above (new laminate flooring, painting throughout, new lighting, etc) – including some nifty tile painting, which transformed the dated bathroom. You can see the before and after results here.
The property was valued at $490,000 prior to the update; $540,000 after. That’s a profit of nearly $45,000 – for a few days labour and minimal spend.
So the moral of the story is: be astute and targeted with the improvements, and get in and out in the shortest possible time. That is the most effective way to boost your rental yield on a limited budget.
Cherie Barber’s next 3-day Renovating For Profit workshop is 13, 14, 15 November, 2015, in Sydney. For information, visit http://renovatingforprofit.com.au/content/renovation-workshop-dates
ABOUT CHERIE BARBER
Cherie Barber is a public speaker, TV renovator on Network Ten’s ‘The Living Room’ and the founder of Renovating For Profit, a company that teaches everyday people how to buy, renovate, sell or rent old properties for a profit.
Disclaimer: This article contains general information. Before you make any financial or investment decision you should seek professional advice to take into account your individual objectives, financial situation and individual needs.