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Renovate Your Investment When? Now or never

Written by Anja Crute

Wise spending is part of wise investing. And its never to late to start – Rhonda Katz

2018 saw rapid movement in the Perth rental market, however just like the Perth sales market the growth is inconsistent and is based heavily on location and lifestyle amenities provided in the property and the neighbourhood.

Whilst you can’t directly control the amenities available in your suburb location, or pick your property up and move it to a location with more favourable returns, you can control the facilities provided in your property and therefore its return.

Properties that are moving quickly in Perth and bucking the poor rental market have modern amenities and simple clean design and décor. Older dated homes take longer to lease, which results in weeks of high vacancy, reduced rental prices and poor-quality applications.

We live in the age of the impatient customer and the impatient tenant, there is only so long we are willing to cook on outdated stoves or with old appliances, use bathrooms with worn fixtures, live on tired carpets and old floor coverings.

Attracting and maintaining a quality tenant means providing an attractive and maintained property. We know of a quality tenant that left because of a poor shower head…there was only so many bad showers they could experience!

Our investor clients often ask when is the best time to renovate their investment property.

Experience tells us that the best time to renovate is when the property is vacant, however some renovations can be done with tenants still in the property. Obviously, this is dependent upon the renovations to be undertaken.

Renovations undertaken during a tenancy can be done as an inducement for the tenant to enter into a longer-term lease at an increased rent or to maintain the property at a liveable standard without the need of creating a vacancy.

Renovations do not necessarily mean gutting the property in total. Renovation could be the installation of built in wardrobes, upgrading bathroom tiling and shower/bath recess, painting, new window coverings, re carpeting and the installation of a new kitchen or new appliances.

We stress that it is unwise to over capitalise by installing top of the range products. This is a mistake that many investors make. Top of the range products not only cost more, but do not necessarily add rental value to the property.

Be careful when considering renovations and take the advice of your Property Manager as to what type of renovations will increase the rental value and what tenants actually desire in their search for a rental property. By knowing what the renting public are looking for and tailoring your renovations to market expectations you are spending your time and investment dollars towards deriving additional income and not simply improving your property.

Remember to retain all records and invoices. Speak to your accountant as to the tax implications of any renovation work that you undertake and also consider obtaining a tax depreciation report so your renovations can be depreciated for tax purposes.

 

About the author

Anja Crute is a Senior Property Manager at Empire Estate Agents in Victoria Park, Perth, a role she holds with real passion at Empire. Anja looks after the ever-changing needs of Owners and Tenants alike and has so over a 28 year period. Full of laughter and always ready to help combined with strength and an intelligence that enables her to venture into all situations with a can do positive attitude.

Need more information or can we help you with any other of your Property Management questions? Feel free to call and speak to us

Empire Estate Agents  to have a chat on (08) 9262 0400 or email

reception@empireestateagents.com or www.empireestateagents.com

“Everyday heroes…going beyond”

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