If you're thinking about renovating your investment property, there are a few things you need to consider. From creating a budget to picking the right fixtures and fittings, getting the administration and project management right is key. Here, we outline some of the main things to consider when you renovate an investment property.
Renovating a property could result in some larger than normal expenses for your property. Make sure you put together a budget before you get started. It's also a good idea to determine which expenses can be fully deducted in the current financial year and the other expenses that will need to be depreciated over several years.
It can take a while to get approval on potential works from some body corporates. If your property is in an apartment building where you'll need approvals, talk to the body corporate and put your case forward early. Include rough timelines for the renovation, your plans for the property, any safety precautions you need to consider and note when noise disruptions may occur.
You may complete this step when you're putting together your budget. Make a list of all the parts of your rental property that you want to upgrade. The general rule of thumb is to spend approximately 3 to 4 per cent of the property's value on kitchen upgrades and under 1 per cent on the bathrooms. When you're thinking of the improvements on this list, consider what will give the property "wow factor" for potential tenants. And don't forget to budget 10 to 20 per cent for contingencies.
Let neighbours of the property know that renovations are taking place and when noise disruptions may occur. If it's an option, you can also display a notice in the building's common areas.
A few careful decisions on fixtures and fittings can make all the difference when it comes to attracting quality tenants. Leave installing new carpets until the end of the renovations to ensure everything is in good condition and fitted properly. Further, any new kitchen benchtops should be heat, scratch and stain resistant. And don't forget to include plenty of power points around the property, especially in the kitchen, living areas and bedroom.