Renovation tips to boost your investment property's ROI
As a residential investment property owner, you always look for ways to increase your return on investment. One of the most effective ways to achieve this is by renovating your investment property. But where do you start? How do you ensure you're getting the most bang for your buck? And what are some common pitfalls to avoid? Here's a guide to renovating investment property to maximise the ROI.
According to Larissa Llowarch, Licensee in Charge at Key2 Realty, renovating your investment property can be a great way to attract better-quality tenants, increase your rental income and boost the value of your asset. However, it's important to plan your renovation carefully and consider the costs and benefits before starting any work.
1. Set a Budget
The first step in renovating your investment property is to set a budget. You need to determine how much you're willing to spend on the renovation and what you hope to achieve. This will help you avoid overspending and ensure you're getting a good ROI.
2. Focus on the Right Areas
When renovating an investment property, it's essential to focus on the areas that will have the biggest impact. Kitchens, bathrooms and outdoor spaces are often the most important areas for tenants, so it's worth investing in these areas to attract higher-quality tenants and increase your rental income.
3. Choose Durable and Low-Maintenance Materials
When choosing materials for your renovation, it's important to choose durable and low-maintenance options. This will not only save you money in the long run but also make your investment property more attractive to potential tenants.
4. Work with a Professional
Unless you're an experienced renovator, it's always a good idea to work with a professional. They can help you plan your renovation, source materials and ensure the work is done to a high standard. This will not only save you time and stress but also ensure you're getting the best ROI for your renovation.
5. Avoid Overcapitalising
One common pitfall of renovating investment properties is overcapitalising. This is when you spend more money on the renovation than you're likely to recoup in rental income or property value. To avoid this, it's important to do your research and ensure your renovation is in line with the local market and tenant expectations.
According to Larissa, "Overcapitalising can be a real danger for investment property owners. It's important to work with a professional who has experience in the local market and can help you determine what renovations are likely to give you the best ROI."
With these expert tips you can confidently embark on your investment property renovation journey, knowing that planning and smart choices will pave the way to a higher ROI and a more successful investment venture.
Helpful websites when embarking on a renovation journey:
- Your Home is a website run by the Australian Government that provides information on home improvement and renovation. Their website has a section on planning and permitting, as well as a directory of accredited builders and tradespeople.
- Houzz is a great website for finding inspiration and ideas for your renovation. You can browse through photos of completed renovations, get advice from interior designers and contractors and even hire someone to help you with your project.
- Renoguide is a comprehensive resource for everything related to home renovation in Australia. You can find information on planning, budgeting, permits and finding contractors.
- Hipages is a marketplace where you can connect with local contractors for your renovation project. You can get quotes from multiple contractors and compare prices before making a decision.