Before completing renovations it is important that you determine what outcome you’re looking for and what the current market is dictating.
Get some guidance from local agents and property managers but keep your budget in perspective.
Here are some of our tips to add value and increase cash flow.
1) Start with increasing kerb appeal
You don’t get a second chance to make a first impression to tenants or valuers and when there is a lot of competition in an area this is a great point to start.
2) Complete the unskilled labour components yourself
This will some money and make sure you get at least 3 quotes for any work you plan to engage a professional for as you will often find the quotes will vary significantly.
Re painting can give your property a huge facelift. Before you start, take a look at new houses/apartment buildings being built in the area and see what colour tones they are using and use something similar.
The builders have already invested time and research into what is in demand but stay away from bold colours – keep it simple.
A tip – you will likely need to replace your power points and light switches once you have painted as they will stand out like a sore thumb.
4) Replace Light Fittings
Light fittings show the age of a property and stand out significantly once you have given the property a refresh. Oyster lights are simple, clean and not expensive.
5) Add some small luxuries
Such as air conditioning, ceiling fans, update the blinds/curtains.
Think about completing preventative maintenance on items to save you money in replacement down the track.
5) Kitchen & Bathrooms
The kitchen and bathroom are the heart and soul of any property and are what will attract tenants as well as assist in increasing the value of the property.
You don’t have to spend $20,000 to update a kitchen or bathroom you can do an overhaul by doing simple things such as retiling the splash back, changing the tap handles, updating fixtures & fitting and replacing the bench top/vanity.
Remember you can still claim depreciation on new fixtures and fittings.
6) Add an extra bedroom
This is a great way to increase value but make sure you don’t alter the walkthrough space or halve the loungeroom size as this can be counterproductive.
7) A Deck
Adding a deck creates more user-friendly space and can be very aesthetically pleasing.
Make sure you check with the local council for things like height restrictions, railing requirements etc and get lots of quotes.
8) Granny flats
Granny flats can be a great return on investment but there are times to do this and times to hold off.
You don’t want to build a granny flat in an oversupplied market as they are harder to rent.
If you have a market that has some supply issues and you are looking to boost cash flow it might make sense, but remember, just because a property can have a granny flat doesn’t mean it should.
You want to make sure you can have drive-through access and enough space between the two dwellings. Appearance does matter. Make sure it doesn’t look like a shipping container. We are fans of pitched or skillion roofs.
9) Car accommodation
One of the best ways to increase the value of your home is to use it to protect your other assets. Sheltered car accommodation is a safe and secure option for housing your vehicle and they’re usually cheaper to build than garages.
Reviewing the performance of your portfolio is something we do regulary for our clients and this includes suggesting ways to add value and increase cash flow. We recently saved a client over $6,000 per year by tweaking their rent and interest rate numbers.
If you’re looking for help to get the best out of your portfolio we’re here to assist.