Investing in property is something we do with a view to receiving a solid, steady rental yield until the time comes to sell, at which point our thoughts turn to capital growth.
Ensuring maximum returns in both circumstances is every investor’s goal, and while it’s impossible to guarantee future percentages or profits in any market, there are plenty of ways that you can maximise the potential of an investment property without falling into the trap of overcapitalising.
Here, we talk about some of the easiest, most economical, and effective ways to help your property perform at its best without having to fork out a fortune.
Ten top tips
1. Paint inside and out
One of the most frequent requests from prospective tenants is that the property be painted. If you have old wallpaper, layers of peeling paint, or multi-coloured feature walls throughout the property, why not pre-empt these requests and give your property a lovely new coat of paint to make it look clean, fresh, and cared for. Standard, neutral colours are always best as they give tenants a blank canvas to help them imagine their own possessions in, and make touch-ups a lot easier.
2. Check your floors
Old, dusty, frayed carpet? Scratched and stained floorboards? Dirty, torn lino? Chipped tiles? These will all be seen as a major drawback by renters. Replacing damaged carpet, lino, or tiles and repolishing floorboards will often only require a small outlay of cash that could add a surprising amount of value to your property. Don’t forget to check with your property manager to see what the local market is after and tailor your choices to fit.
3. Replace your taps
Updating old tapware has two advantages. First, sleek new mixer taps look great and give wet areas a shiny new look for a relatively low cost. Second, installing low-flow taps will mean less water usage and smaller bills for you or your tenant, depending on your lease agreement. It’s a win-win either way!
4. Have a look at your handles
Cabinets and drawers, windows and doors - check the handles and latches to see if they are corroded, loose, or faulty. If they can’t be repaired or look terribly outdated, consider replacing them with more modern, stylish handles. It’s a quick, easy fix that can absolutely transform the aesthetics of room.
5. Build in some storage
People have stuff and storing stuff is always an issue for owners and tenants alike. Having some custom-fit storage built in to your property is likely to prove popular with renters. Think about wardrobes, kitchen and bathroom cabinets, or even a bike shed in the garden. Installing bookshelves in under-stair areas or other difficult to furnish nooks is another great idea.
6. Update old appliances
That stove, oven, or extractor fan from the turn of the century will probably have seen better days. It will probably also be a lot less energy-efficient than newer models. Prospective tenants will be well-aware of this, and the perceived value of your property could suffer because of it. So, it might be worth considering an update to something more functional but still relatively inexpensive to help maximise your rental returns.
7. Add an extra or two
You don’t have to fill it with high-end glam, but you might give your property an edge if you invest in a couple of well-considered pieces that your tenants will love and be willing to pay a premium for. Dishwashers, ceiling fans, good quality blinds, or a washer/dryer set are just a few examples. Again, check with your manager to see what people in your area value and be guided by that.
8. Think about pets
Aussies love their fur families and finding a property that is pet-adapted can be a big plus for tenants. Secure fencing, hard-surface floors, or even a cat-flap or dog-door onto the backyard could work, as long as it’s not going to compromise your tenant’s sense of security.
9. Landscape a little
There’s a big difference between a weed-ridden, overgrown patch of etiolated shrubs and a well-kept garden bed with a nicely-paved outdoor area. Think about planting some drought-resistant natives, sturdy climbers with gorgeously scented flowers, or brightly flowering succulents that will survive with minimum attention.
10. Create an outdoor living area
Some well-placed pavers, a simple timber pergola, or perhaps a small porch will hint at summer barbecues, handball competitions with the kids, or other outdoor lifestyle events that Australians love. A relatively small investment with dream-sized potential for adding value to your property.
While every property is different, and some of the tips here might not be applicable to your investment property, many of these small changes could make a huge difference to the perceived and potential value of your investment property in the eyes of tenants and future buyers.
Understanding the market and the cost-benefit balance of any changes you decide to make is essential, so make sure talk to your financial advisor and local property manager and ask them for advice specific to your situation. Their expert knowledge will point you in the right direction, helping you maximise your returns without overcapitalising.
To talk to your local DiJones property manager about your investment property click here.
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