By Rob Farmer
Property owners can substantially increase the cashflow from their investments – and accelerate the growth of their property portfolio – by doing minor and often inexpensive improvements.
It is amazing how many landlords overlook the presentation and renovation of their investment properties when a few carefully spent dollars can make the world of difference to the appearance of the property and therefore competition to rent it.
Even when vacancy rates are at record low levels in Victoria, New South Wales and Queensland, tenants show a distinct lack of interest in properties that are tired, shabby or lacking in presentation.
The more people who love your property, the more will want to rent it, and increased demand leads to higher rents, fewer vacancies and the opportunity to choose a higher quality tenant.
There is a direct correlation between the presentation of rental properties and the calibre of people applying to lease them. A well-presented rental property attracts better applicants who are more willing to pay a higher rent to secure accommodation that suits their lifestyle.
Experience also shows that tenants are far more diligent in caring for a property that is attractively presented.
A manager of a property management office in the inner Melbourne suburb of Richmond said a client fully renovated the kitchen and bathroom, painted the interior throughout and replaced the carpet and blinds in her one-bedroom apartment for a total cost of $10,000.
“The owner sourced her own contractors, did the painting and bought all the materials herself to save money, but the effort was worthwhile because the rent increased from $205 to $280 a week, which after tax deductions substantially improved her cashflow,” Ms Giacometti said.
Under $10,000 – 5 things tenants want
- Get the basics right
Carpets should be professionally steam-cleaned, drapes dry-cleaned, and scuffed or grubby paintwork should be touched up and appliances checked to ensure they are operating efficiently between tenancies. These items should be regarded as maintenance, not improvements.
- Kitchens
Illusion is an integral part of the renovation process if you don’t want to spend a fortune. By creating visual effects that attract the eye of a potential tenant, attention is diverted from less desirable aspects of a property. For example, replacing a white upright stove with a stainless steel appliance may lead to the impression that the whole kitchen is stainless steel.
Painting kitchen cupboard doors, replacing kitchen door knobs and installing a new flick mixer can leave your prospective tenant feeling like they have a new and expensive kitchen.
- Bathrooms
Replacing taps, shower heads and other fittings with modern equipment can give wet areas an improved look. New door and cupboard knobs, new mirrors and replacing a shower curtain with a shower screen can make a massive difference.
A tired bathroom can be brought to life by resurfacing the bath, basin and shower base and painting old-fashioned or garish tiles.
- Livings areas and bedrooms
My pet hate is cheap fluorescent lighting that is the living reality of too many rental properties. The ambience of a property can be significantly improved by replacing the fluro ceiling light with low-voltage fittings that plug into existing sockets without needing an electrician. Modern pendants for bedrooms are a big plus.
Light switches and door knobs can show the age of a property. Changing light switches and installing dimmer switches can create the illusion of a newly refurbished property.
Homewares and furnishing stores stock an extensive range of off-the-shelf blinds that provide privacy and also improve the appearance of lounge room and bedroom windows immeasurably.
First impressions are lasting impressions so it is also worthwhile considering installing a floating floor or artificial timber flooring to the entrance hall and high-traffic areas.
The manager of RUN’s property management office in the inner Melbourne suburb of Carlton, Stephen Ericksen, said reverse-cycle air conditioning attracts tenants and immediately results in a rent increase of at least a $20 per week.
- Laundry
An internal laundry is high on the agenda for tenants and it usually dictates whether they will apply for a property. It is often feasible to build a front-loading washing machine, clothes dryer and trough into a large cupboard for a relatively modest budget in an apartment in a block which has communal washing facilities. It requires a plumber but the outlay can be well worth the cost in terms of increased attractiveness to tenants and rental return.