As a property investor, the primary aim of renovating your rental property should be to increase its value and maximise your rental returns.
However, a good renovation requires careful planning, preparation, and the right advice from your property management team. Before you make the commitment to change, make sure you avoid these common renovation mistakes.
Renovation Mistake # 1 – Not considering your target market
If you’re renovating with the intention of attracting tenants and increasing your rental returns, you will need to know what your desired tenants are looking for. Ultimately, this will determine how much money you make in rent payments. And remember – what appeals to you may not appeal to others. Researching the local property market will allow you to compare similar rental properties in your area to get an idea of what competition you’re up against. Your local property management team will also be able to advise you on how to make your Perth rental property more attractive to prospective tenants.
Renovation Mistake # 2 – Overcapitalising on renovations
One of the biggest mistakes made by property owners is overcapitalising on rental renovations. This is when the renovation costs exceed the value added to the property. When it comes to budgeting for a renovation, don’t underestimate the costs involved. On top of labour costs and building materials, you will also need to consider additional costs such as council application fees, permits, and any loss of rental income incurred during the renovation. Make sure you factor these into your budget to avoid getting hit by hidden costs once the project is underway.
Renovation Mistake # 3 – Making the wrong renovations
When renovating to increase rental value, you need to be certain the changes you make will actually increase the value of your Perth rental property. As a property investor, you don’t want to spend your time and resources on a renovation that doesn’t pay you back in profit. To avoid making unnecessary and costly updates, make sure you research where you can make the most worthwhile changes. You may also want to consider which rooms in your Perth rental are used most, as these may warrant greater attention when it comes to making improvements. Make sure you speak to your property management team when drawing up your renovation plan to ensure youre making the right decisions for you and your investment.
Renovation Mistake # 4 – Overlooking street appeal
It’s all well and good improving the inside of your Perth rental property, but what about the outside? After all, first impressions count, and this is the first thing your tenants or future buyers will see. As well as updating the interiors of your investment property, consider the small things you can do to improve the exterior. Is your garden in good condition or relatively low maintenance? Does your fence or front door need a fresh coat of paint? These changes don’t need to be huge, but they could make the difference when it comes to offers.
Renovation Mistake # 5 – Choosing the DIY approach
Whilst a DIY approach may suit minor changes, some renovations are best left to the professionals. If you’re carrying out any major works, your renovation will be safest in the hands of accredited contractors or builders. By researching and selecting experienced contractors, you are likely to end up with a higher quality renovation that requires less maintenance in future. Otherwise, you may end up (literally) paying for your mistakes.
Renovation Mistake # 6 – Not consulting a property management team
Just as major works are best left to accredited builders, you shouldn’t overlook the value of professional advice when it comes to planning for renovations. As experts in their field, property managers are able to provide invaluable advice on the Perth property market and increasing the value of your Perth rental properties. From day-to-day management to maximising returns on your Perth rental, the specialised property management team at Rentwest Solutions can provide the support you need to profit from your investment venture.
For more information about Rentwest Solutions’s property management solutions, contact the team on 9314 9888 or emails us at [email protected].