What is the flow on effect of renovating your investment property?
There are significant benefits to renovating your investment property. Making adjustments and improvements to your investment can reap rewards. As quoted in the BMT insider, 2 key benefits of renovating your investment property include retaining quality tenants along with increasing sale price and capital gains.
As a landlord it is important not to be dismissive of a tenant’s ideas or concerns, especially if your renting days are over, as it can be difficult to think about how much of a positive influence practical and minor upgrades to a property can have on those leasing it.
Clearly the best time for renovations such as painting, and carpeting are best done when you first buy the property or in between leases, but there are many minor works that renters wont mind happening while they are there.
Upgrades to ovens, air-conditioning, and heating are always welcomed by tenants. Or you could add features that will make the property more liveable such as clothes dryers, a dishwasher or quality blinds and curtains.
The flow-on effect of renovating and upgrading is that existing tenants will be happier and more comfortable, and if you are looking for tenants, you will have a wider selection of prospective tenants to choose from.
By showing that you are prepared to improve a property and not just let it fall apart shows respect for your tenants and can result in positive morale which will show through in your tenant’s loyalty and desire to keep your investment in good shape.
As the team at BMT highlight, renovating your property every few years will most likely improve the price when you sell. Even if you have no plans to sell, it is worth while consistently keeping the property up to date and in good condition in the event circumstances change and you need to sell quickly.
Tips to Help Keep it Fresh
– The best way to keep your investment looking fresh is to paint the wall’s at least every 10 years
– Stained carpet and damaged floorboards makes the property less appealing, so invest in a professional clean or polishing.
– If the property is vacant, consider replacing the carpet
– If you have the means, renovating the kitchen and bathroom will add significant value
– It is also important to maintain the front and back yards if your tenant is not currently doing so
It is essential to choose colours, fixtures and furnishings that won’t go out of fashion. The safest bet is to stick to neutral colours or use a consultant to guide you. By using classic colours and styles, your property will appeal to a larger range of buyers, thus increasing the sale price.
Keep in mind that any renovations which are completed should increase your depreciation claim for eligible items, which in turn will reduce your tax bill. You may also be eligible to ‘scrap’ any assets you’ve removed during renovations. For the most up to date and accurate information regarding depreciation benefits please contact BMT Tax Depreciation Quantity Surveyors.
Written by Nathan Ashton