The aim when buying an investment property is to find a great property that needs just a little bit of work, buy it below market value, and put in the elbow grease to make big profits. Often what happens though, is that elbow grease turns out to cost more money than you hoped and your returns are eaten into.
Here are some tips that will improve the rental property without blowing your budget.
Treat the property as a house, not a home. Your tenants will treat the property as their home, but that’s not your job. You will never live there (hopefully), so don’t over-renovate a property. That may sound callous, but the idea is to get it to a clean, safe, livable space that is also inviting.
Answer the question: ‘Can I live here?’ When a potential tenant is walking around the property, answer that un-asked question ‘can I live here’. Make sure it is bright as possible, that it’s spotlessly clean and has a feeling of openness. When you are considering purchasing the property in the first place, ask yourself the same questions – could a tenant live here? Does it feel open and bright? What would make it feel inviting? It may mean that you realise knocking down a wall to make an open-plan layout my be the best way to go.
Repair if at all possible. If at all possible repair anything that is broken before replacing it. Repairing is usually cheaper than replacing, and that is a good place to start in terms of saving money.
- Clean carpets rather than replace them.
- Clean the ceilings and walls before deciding if they really do need to be repainted.
- Can the 3 broken tiles be replaced rather than pulling up the whole floor and starting again?
Kitchens and bathrooms are the key. This is where future tenants will look for the ‘wow’. No one wants to have to have a shower in a mould ridden 70’s styled bathroom. The same goes for the kitchen – especially if the tenants love cooking.
Again you don’t have to go all out in these areas, resurfacing the bath and the bench tops, replacing hardware, installing a new oven and topped off with a new paint job may be enough. Try to avoid ripping everything out and starting again – unless there is major damage that really needs to be addressed.
The outside. Make sure there is no rubbish the fence and mailbox are in great shape, weed the garden, mow the lawn and put down some mulch and the garden will look much better! Once you have done that, plant some cheerful flowers near the front and back doors and you will be making a fantastic impression.
Little tweaks. When you have gone though the above, but still feel it needs a little something, here’s a guide on what is a good idea to replace and update:
- Any lighting that is at least 20 years old
- Same for the carpet and wallpaper
- Blinds with broken or missing slats
- Hardware that has lost it’s finish
Put all the above together with a very thorough clean, and you may realize that you didn’t have to be as extravagant as you thought when it came to renovating.
What are your tricks and tips when it comes to renovating an investment property?