Pump Up The Value
Jeremy Gray from Builderscrack discusses simple ways to add value to your investment property.
30 April 2021
The improvements you should undertake to add value to your investment property chiefly depend on your property investment strategy. Whether you’re selling, building capital gains, or tenanting indefinitely, there is often an opportunity to increase your return. Key factors that will determine how you add value to your investment property:•overall investment strategy
• property location
• dwelling type
• buyer or renter profile
• purchase and/or servicing costs
• ROI (return on investment) target.
Considering the type of buyer or renter profile you want to attract in more detail will help focus your improvement plan. A family, for example, will be looking for features conducive to home life with kids such as a bathtub, separate living to playroom, and a large backyard; versus, a single professional wanting modern appliances and minimal garden upkeep.
If your strategy is improving to sell this will involve creating great first impressions through strong presentation, vs tenanting indefinitely which will revolve more around ensuring your property is well maintained.
With the recent rental property policy changes rolling out, you may be re-evaluating your investment
strategy. Alongside this, how and where you’re investing in maintenance and improvements to your portfolio should be considered too.
Improvements and renovations need four things to be profitable.
• A well mapped-out wider investment strategy.
• A thorough assessment of the target market.
• Careful planning of budget and resources.
• Stringent management of your team and timeline.
Adding Value When Selling
Exterior painting is a great way to add value to your home. It will set you back around $4,000-$7,000 for a single-storey home and between $12,000 and $27,000 for a double storey. Exterior painting will:
• boost street appeal
• create great first impressions
• modernise the property.
Talk with your painter about getting involved in prepping the exterior ahead of painting – ie water blasting, scraping off original paint and sanding down (depending on exterior material). Discuss product and finish options with them, some are more expensive than others.
Interior painting for a two-bedroom house will cost up to $7,500, or between $8,000 and $14,000 for a threebedroom house. To cut cost, you should consider whether a touch up is more suitable than a full repaint. Some hightraffic areas may benefit from a full paint, while low-impact areas like bedrooms may benefit less. Interior painting can:
• create a fresh look and feel
• reduce odours
• attract a wider range of buyers with a neutral theme.
Landscaping can be very cost effective as well. You will be looking at a budget of between $1,000 and $5,000 for the following services: removing weeds; shaping overgrown trees and pruning shrubs; planting natives and perennials; and illuminating feature areas outsidewith solar lighting.
Landscaping creates value by:
• demonstrating nothing has been neglected (inside or out)
• Increasing the level of sophistication.
Kitchens are often a key selling point in a home. A basic kitchen renovation can cost between $10,000 and $30,000 and will add value when it comes to selling. If you keep cabinetry and replace doors and countertops you will be able to keep the costs down. Talk to a kitchen designer about their most cost-effective range; typically it will be of no less quality, but have less colour and finish choice. Kitchens add value through:
• improved functionality
• reduced maintenance or replacement costs.
Bathrooms are another focal point in the home. A basic bathroom renovation can be conducted for between $5,000 and $15,000. Cost-effective bathroom renovation options include freshening
up the walls with mould-resistant paint; vanity upgrades and paint; or replacing a stained toilet. Updating and replacing fittings like sink faucets, toilet seats, towel rails and toilet roll holders are simple solutions that won’t cost you much.
When considering a makeover of your rental, ask yourself the question: “Would I live here?
Making The Home Attractive To Tenants
When considering a makeover of your rental, ask yourself the question:
“Would I live here?”
There are some key areas that will make the rental more attractive to tenants.
Carpet is one of the key selling points in a rental property. For a unit under 50m2, you could expect to spend up to $3,000 on new carpet, for larger homes the cost could be up to $10,000. Polyester and polypropylene is wellpriced, super soft and incredibly stain and fade resistant. Solution-dyed nylon is hard wearing, a go-to for families with kids and pets. New carpet adds value because it looks, smells and feels clean. If moving from vinyl or wood, carpet increases heat and acoustic insulation.
There are some simple added extras that can help you attract good tenants, without blowing out your budget. Maybe you could edge the lawn, put down weed mat and bark in the garden? Laying paving stones near the letterbox and planting common herbs and fruit trees that are useful for cooking are simple options to make you stand out.
Safety and security are important features when trying to attract a good renter. For a budget of between $500 and $1,500, you will be able to undertake the following:
• maintenance check of doors, locks, gates and alarms
• ensuring there’s an adequate number of power points so tenants won’t have to use extension cords or
• installing security lights out front and back.
Why It Matters
When you differentiate your property through improvements, not only do you increase the value of your property, but you also increase your ROI by:
• grabbing the attention of prospective tenants/buyers
• driving more enquiries from better-suited audiences
• enduring less days on market and selling/leasing faster
• holding ground for a higher asking price.
It’s a good idea to drive property improvements with your overall investment strategy and focus on longterm cost-efficiency over the cheapest up-front cost.
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