Article - 28 Jun, 2022
Planning and budgeting a rental renovation can be daunting to say the least. If you are looking to renovate your first rental property, or even your second or third, look no further. You might have questions like; Where do I even start? What are the things I need to think of when doing a rental renovation? How do I plan and make a budget? What are the things I should do and what are the things I should avoid? How do I ensure my tenants will love the house and want to stay long-term?
First things first, as this is a rental property, it is important to not let emotions get in the way of your decision-making. You want the property to be nice and comfortable for your tenants, but you need to work within your budget and only do what you need to do and stick to your renovation rules.
Rules and Budgeting
Let’s start with the budget. Having a clear budget before you even purchase your rental property is important, as you need to know how much money you are spending in total to get the property ready to be rented out. If this is an existing property that you own, you still need to ensure that everything you do gives you a return on the money you have invested. The return is seen as an increase in rent after it has been renovated. You want at least a 15% return on the money invested. You also want to ensure what you are doing increases the value of your property, which means the property value will go up, which again means you get more equity. Another thing to think of is the colour palette, you want nice and neutral colours throughout, beige or off-white walls, dark carpet and dark curtains. You will thank me later. It also means it is easy for your tenants to put their own flair on the place and make it their own.
How do you even know what needs doing? If we start at the bottom, new flooring is something that always enhances the look and feel of a home.
Fresh carpet and vinyl throughout the house make a huge difference. We normally choose the versatile and cost-effective product called vinyl-plank, which is a step up from vinyl, but is more durable and looks better, so for us it is worth the extra cost up front.
Painting the interior walls of the house is a no-brainer and really lifts the look of the interior instantly and is always part of our renovation planning, unless it is already freshly painted. And might I add, as long as the paint job has been done properly. We have certainly seen examples where the whole house has been painted, but it has been done to such a terrible standard, so you have to start all over again anyway.
Next, we want to focus on the kitchen and bathroom. The selling point of the house, even though it is a rental, we still want these to stand out, be functionable and of a good standard. We don’t want to do anything crazy, like spending 10’s of thousands on the kitchen, but we want it to look nice at an affordable price point. You can easily just upgrade the benchtop, add new door handles and paint the cabinet doors, which will make the kitchen look fresh and new, without spending more than a few thousand dollars. The same goes for the bathroom, only do what you have to, a good clean goes a long way sometimes. If the vanity is old and dated, it can easily be replaced in the same location for less than a thousand dollars and it will give the bathroom a great facelift. Replacing the shower curtain with a glass divider is another simple trick that enhances the overall look of the bathroom. You can even replace the old shower lining with tile-look shower lining. It is a cheap and great-looking alternative to standard shower lining.
The little things
Don’t forget the little things, like light fittings and curtains. New curtains paired with new carpet and freshly painted walls are a must. Make sure you add a small budget to update old curtains and light fittings, all these little details add value and in turn increase the value of the property and make it appealing to tenants.
Remember to include the outside of your property when you are planning your renovation. What does the property look like from the street? Does it have street appeal? If not, what can you do to improve the look of the front of the property to give it that street appeal?
If there is something easy you can do, like remove that old tree that is blocking the front of the house, or that massive hedge that has not been trimmed in years, give that a good trim, or maybe the house just needs a bit of paint to freshen up? Always look for ways you can add value without spending more than it will return you in value. Will adding that fence at the front of the property increase the value of the property and increase the rent? Is the property going to be more secure and private, meaning your tenants are willing to pay more than if it was not fully fenced? This ultimately comes down to who your ideal tenant is and what they are looking for. For instance, a family will have different needs than a professional couple.
To conclude, the things you always want to include in your renovation are:
Making the extra effort, showing your tenants you care, might even make them want to stay for longer, which is a win-win for both parties. Your rental property is after all their home, and we want our tenants to be as comfortable as possible, so we always go above and beyond, all whilst sticking to our rules and budget.
Therese’s curiosity for adventure and new experiences made her take the leap into property investment. Together with her partner Luke, they have embraced the property investment journey to transform old houses into beautiful, warm and healthy homes.
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