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How-to guide: adding an extra bedroom when renovating a property?

Ilse Wolfe, property investment coach at Opes Accelerate, places adding an extra bedroom to a property as number one on her Cashflow HackingTM principles.

By: Ilse Wolfe

1 January 2022

An extra bedroom is the quickest and most costeffective way to increase the value and cash flow of a would-be rental property. It’s no wonder this is the number one topic for investors thinking, or actively doing, a renovations-based strategy.

Ilse says sometimes it’s obvious where the extra bedroom is going to go. Other times it’s not. Not every house has the potential to be so reconfigured.

“Each property is unique, which does mean you need to be creative,” she says. “You can’t look at adding the extra bedroom in isolation.”

The first step is finding the right house, big enough to withstand the renovations needed. Ilse says, the minimum size required to convert a two-bedroom into a three-bed is 80sq m.

“For a three to four-bedroom property, ideally, you want 95sq m or more.”

Most houses built between 1960 to 1980 will likely have some excess space to squeeze out a bedroom, without it being too obvious. According to most floorplans, the excess space will usually be found in a superfluous dining room or oversized kitchen.

For any bedroom, you’re going to need to be a minimum of seven to eight square metres, including a wardrobe, she says.

“Any smaller than that is going to feel like a study more than a qualified double bedroom,” she says.

It won’t be seen as a bona-fide extra bedroom without a wardrobe, and therefore won’t add as much value or rental potential to the property.

The dining room conversion is the cheapest way to go about this part of the renovation. This should cost about $7,000-$8,000, which includes all of the professionals required. This will take around one-to-two weeks to finish.

Roughly speaking, Ilse reckons you can expect to make this back in the first year, through increased rent. She admits the suggestion to transfigure a dining room into a bedroom may seem odd to some investors.

But it depends on the future tenant, and the location of the property. A house in a lower-socioeconomic area wouldn’t think twice about it, but a suburb in another part of town might.

“It all comes back to the core thinking of who ‘is my future tenant is going to be?’,” Ilse says.
“The main thing with every renovation is don’t try to force anything that doesn’t work for the people living in the house.”

An example of how a seemingly odd floorplan shuffle can result in a successful renovation is one of Ilse’s properties in Hamilton. Here, she carved the extra bedroom out of the kitchen.

“The house would be very odd without a kitchen,” she jokes. “So, I turned the lounge into an open plan kitchen/living area.”

A kitchen-turned-bedroom would sit at the more challenging (and more costly) end of a renovation strategy, but it’s not impossible–if it works. But this is a big but.

One of the biggest mistakes you can make, is to force a bedroom into a house that doesn’t want one, Ilse says.

“I’ve seen some horrific renovations, where investors have really got it wrong,” she says. “And if it doesn’t feel organic or natural to the floor plan, don’t do it. It can’t feel contrived.”

At the end of the day, it’s on the investor, to scrutinise whatever valueadd you are giving to the property from all angles. Make sure whatever you plan to do is going to be appropriate before committing to the purchase.


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