I am looking to buy an older property (built in the 70's) that has a good layout except for one of the bedrooms (comes off an enclosed sunroom) and is pretty much in original condition, but is still clean and liveable as it is. It also has no carport or garage, but does have a driveway so this is easy fixed.
I want to do some minor cosmetic renovations to increase the rent, this is a first for me and am not sure where the best place to spend money would be.
Does anyone have any suggestions on what things add the most value to the rent?
Make sure the paintwork is clean and not an offensive seventies toning, same goes for kicthen benches and tiles, if they are in a sound condition you may be able to resurface them, or if the cupboard caracasses are good, simply remove and replace the benchtops. Same goes for carpets, go for hard wearing, smooth rather than textured carpets. Does i have built in wardrobes? These are something that most tenants want and need.
Wih regards to the bedroom can you get a new doorway cut into a common hall? I may be nice, depending on room layout, to still have a door out into a 'private' sunroom. Make sure that there are no electrical cables within the wall where you are putting the doorway.
A carport or garage would be a good idea.
good luck
Sonya
Roof rejuvination, hws/plumbing/electrical system & tuckpointing – these always seem to be the neglected ones.
It's an important question.
The biggest factors in rental yield are, of course, location and number of bedrooms. I haven't found that I can add tremendous rental value by making cosmetic changes.
Instead, my focus is on reducing cost ie making improvements to likely problem areas.
Re-roofing, re-stumping and fixing plumbing/electrical problems are all boring, but the potential costs in terms of money and time over the course of the rental period can be significant.
Beyond that, airconditioning adds value, and cosmetic improvements to bathroom and kitchens help attract a few dollars more.Whist is isn't that common in housing anymore if you want to buy an older house to renovate, be careful it doesn't contain any asbestos products. Whilst these homes are perfectly safe to live in (or so they say) any renos or building works that will disturb the asbestos can be expensive.
Hi dbliss
As a general rule, improvements to the interior will increase your yield and improvements to the exterior will increase equity, so make sure the outside is tidy but don't spend a lot of money here (however, if you wanted to reval at the end of your reno you might put a bit more effort here).
The others are right – a fresh paint job (walls prepared well and then painted in a neutral, light colour), nice looking hard wearing flooring and a 'trick up' in the kitchen and bathroom which may include new bench-top, handles etc.., new toilet and vanity.
The trick is to establish your renovating budget first and then figure out what you are going to do to the property within that budget. As a general rule, I get my clients to budget 5-7% of the pre-renovation property value. This is very general and of course depends on the type of property it is, where the property is (what are other similar renovated properties in the area valued at?) and your expereince as a renovator.
I would tend to spend money on the visible things in the property (not wiring etc… unless it needs it for safety sake or plumbing etc.). Your tenant is not going to notice those things and therefore it will be difficult to increase the rent.
Another great thing to do is to figure out who your target rental audience is and then cater your reno to them. For instance, if your rental audience are young families, you would make sure the yard was secure. Or if the target rental audience are single mothers, maybe you install an alarm. You can talk to local property managers to find out who is likley to rent your property in the future and then brainstorm about what that type of person places value on. For instance if your target renters are young families, then you might think twice about installing carpet. On the flipside, an older couple might prefer this sort of flooring. See what I mean?
Hope that helps!
Jane – Hotspace | Hotspace Consultants
http://hotspaceconsultants.com/home
Email Me | Phone MeRenovating for Profit specialist
Hi dbliss,
We purchased an old 2BR property also around the same age in May 09. Initial rental appraisal was $301 per week. Did the following on a small $12K budget with much of our own labour.1 – Restumped with new concrete stumps. That sorted out the bedroom doors not being able to close. ($4700)
2 – Got a tradie in to replace the single hung window springs as that they actually work. ($1400)
3 – Used around 20 – 25L of wall and ceiling paint to cover the baby pink and green paint in the property. We did this ourselves and it was lots of work. My wife was also 4 months pregnant when we started this project. ($300)
4 – Replaced the original carpets with near-new commercial grade ones. ($1400) 5 – Got an electrician to replace all old light sockets, switches and single powerpoints to double ones. The property was so old there was no earth wiring inside the unit. ($900)
Total material course comes up to around $8700. $3000 was spent on interest payments.
Property was rented out for $320 per wk, an increase of 8.2% from initial rental appraisal. A decent effort considering it was our first reno project ever.
We just had the property revalued and are in the process of organising a major renovation as the tenant is moving out in Sept. Hope this info helps.
Regards
Daniel Lee
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