If you’re looking to boost your rental yield on an investment property, then make sure you finance the right renovations or new home build from the start. It doesn’t have to cost a fortune, but implementing changes that add value can make your property stand out from its competition (and be rented out more quickly too!).
Finding ways to maximise your property’s potential can be challenging for new investors. It’s easy to get caught up with making changes you want to see, but if you’re renting it out for investment purposes, thinking with your head and not your heart is vital. Once you’ve sought professional property investment advice, there is plenty that can be done to achieve that added value. It just takes a little experience, a clear budget and a few tips to know what you should be looking out for. Here are some ideas to inspire you:
Kerb Appeal Still Matters
While online technology has made it easier to sift through potential properties, it doesn’t mean that kerb appeal has gone out of the window. Kerb appeal is as important as ever and it is key to creating a positive first impression to potential tenants. How your property is presented from the outside also shows how much pride you as the owner have in it. People gain confidence from a property that looks well-maintained and loved, so how does yours measure up?
Attractive properties with manicured lawns and appealing front yards will naturally rent out quicker. Render ugly brickwork, add a fresh lick of paint and install a new letterbox to give your property that instant ‘lift’ without breaking the bank.
And transform a bleak, barren front yard by introducing some easy-to-care-for greenery, even if is just a few plant pots. Equally, if your front yard is overgrown, clear weeds, cut back plants and pave an inviting pathway from the street to the front door to create a smarter look.
And remember, tenants not only want an attractive, tidy home, they also want something that is easy to maintain.
Update the Kitchen and Bathroom
The kitchen is the hub of the home and should be treated as such. Nowadays, tenants expect contemporary cabinets, modern appliances and ample storage space. And second to the kitchen is the bathroom. Outdated fixtures in either room should be replaced to create a modern and attractive appeal. Minor changes that can make a big impact include new flooring (laminate floorboards are ideal), and fixing or replacing leaky taps. Old cabinets can be given a new lease of life with a fresh coat of paint and new door and drawer handles, while an attractive new benchtop can take the space to a new level.
Lighting can also change the dynamics of the space, so invest in new light fittings for both rooms to create a more pleasant ambience.
For a more high-end rental, layer in one or two luxury items. Frosted glass or wall-to-floor tiles in the bathroom, or a new tile splashback in the kitchen are easy ways to create a stylish, more luxurious feel.
Include the Right Appliances
Newly updated appliances in the kitchen and bathroom are vital, but what about the rest of the home? Out of all the tech-appliances in the home, heating and cooling are generally the most important. Whilst it may be tempting to save money and not provide extra appliances, investments such as ducted heating and air conditioning are almost considered the norm these days. Also, a dishwasher in the kitchen is another appliance most tenants expect.
Invest in the Back Garden
Don’t underestimate the importance of landscaping. The Australian lifestyle is big on outdoor living, so tenants want a garden space that’s attractive. From the front, it sets up a good image of the property. From the back, it creates a haven for tenants to relax and entertain in. If budget permits, for high-end properties, adding a deck or alfresco patio area with mood lighting can boost the value of a property massively. For tighter budgets, laying down new lawn, and adding colour and form with plants can make a big difference.
Investment properties with better privacy always tend to rent out more quickly too. Consider adding screening plants to soften the outdoor space and boost privacy levels. Fast-growing plants like bamboo are hardy and great for adding a lush privacy wall.
Create Room to Move
Adding extra space and smart storage solutions are a great way to lift the property’s value. Depending on the layout of the house, you can knock down non-load-bearing walls to make rooms look bigger by combining them. Open-plan living tends to be a necessity for many people and can also make a home seem larger due to the increased light and flow. Before you start knocking down any walls though, make sure you do your research! While open-plan living is appealing and can give your property a boost in a buyer’s market, the cost of the investment will not necessarily pay a dividend. It largely depends on your target market, the condition and features of competing properties and the expected rental return.
For a higher-end budget, adding a bedroom or expanding the property out or up can raise the value through the roof. Convert an artic, add a bathroom or a home office for extra value, but again, research is key!
This is more at the high-end of the scale, but for property investors that do have the budget, solar power is definitely a worthwhile investment. It’s a great attraction for tenants because they’ll be saving a lot on the power bills and for you as the landlord, it can help you to command a slightly higher rental rate. So, it’s a winning benefit for both the tenant and yourself as the property owner.