If you are planning to renovate or buy an investment property, you will need to think carefully about the decision.

It’s common for investors to believe that a property needs to be renovated in order to be more appealing and more liveable, particularly when buying investment properties.

In addition to ticking all investors’ boxes, investment properties can meet all the needs of tenants, even if they do not tick all their own boxes.

Before renovating, investors should consider a few key factors.

Do you really need to renovate the property?

Is the renovation solely for my personal taste?

Is this a cosmetic change or an infrastructure change?

The benefits of renovations can often outweigh the costs, but renovations aren’t just about what changes you make, but also when you do them.

Renovating vs. repairing

An investor might consider renovating or repairing a rental to increase its earning power.

To make a rental more appealing to renters, sometimes simple repairs are all that is needed. For example, replacing the handles on kitchen cabinets and the taps and shower heads in the bathroom.

It may also be necessary to renovate a rental property so that there is interest and demand for it, such as knocking down walls to make a bigger kitchen or adding an additional bedroom.

Before repairing and renovating an investment property, list the areas that need upgrading in priority, taking into account what potential investors will see when they visit for an open house.

It’s important to research the project and make sure you’re renovating or making repairs for the right reason (to make the house more liveable) rather than to suit your tastes.

You don’t always need to make major changes when renovating.

Identifying market needs

In order to know when to renovate, it is also important to understand market demand. Increasing market demand may indicate that properties with an additional bedroom (rather than a second living space) are more desirable.

To attract more tenants during inspections, you might renovate your investment property to create an additional bedroom by converting a space.

Big changes, however, are not necessarily dictated by market demands.

A lot of renters are looking for a place they can live in that is clean and liveable.

To increase demographic appeal, you simply need to replace outdated fittings with modern finishes and paint walls and fixtures in neutral colours.

When attempting to save money on renovations, it is also important to understand the market demand.

Renovations to infrastructure might be undertaken by investors only to discover there isn’t a sufficient rental market at the moment.

As a result, investors have to consider both the lack of rent and renovation costs.

Knowing the capital requirement and the tenancy costs/conditions

An investor’s desire to create more income from their investment determines when and if to renovate their rental property.

The thing is, what happens when renovations are done unnecessarily? In the end, investors lose money.

In order to increase profitability and liveability, determine what truly needs to be done before making any changes.

Capital, costs, and conditions should be considered once the changes have been determined and market and demographic research have been undertaken to support the renovation’s viability.

Setting up a budget will ensure that there are no surprises when it comes to paying the bills. Investors need to know and understand how much the renovations may end up costing so they are aware of what to expect.

So, even if the worst happens and the property remains vacant for months, investors will know ahead of time if they can afford the costs.

Legal and safe work is also important. Make sure all relevant permits, certificates, and plans are in place. Renovations are safer and legal when they are done this way.

Planning considerations

When you think of a liveable and comfortable home, what comes to mind?

In the current housing market, many first-time buyers, including young couples and families, prefer to rent rather than buy a home.

The need to make tenants feel at home is important due to the prevalence of long-term tenancies.

Make sure things such as dishwashers, dryers, and washers will enhance the liveability of your rental property.

You can help renters visualise themselves living in your rental property by adding simple features such as modern fittings or neutral colour palettes.

Tenant rights: Are they important?

Whenever you plan to make repairs or renovate a property, you must consider whether you will disrupt tenants who are currently living there.

You may need to consider alternative options to not upset your tenants if they are happy to endure minor repairs.

When you ask your tenants to leave a property temporarily, you may need to provide them with plenty of notice by law, depending on your state’s tenancy laws.

Are you ready to renovate?

Renovation requires practical consideration. It is important for investors to consider a wide variety of factors.

It is a case of determining what changes to make and when to make them get the best results when considering renovations, from the scale of changes to the costs involved.

The process of upgrading your investment property does not have to be difficult if you establish what your property needs are, understand market demand, and understand the costs involved.