Whether you’re a landlord looking to increase rental income or an entrepreneur looking to flip a home, at some point every property investor needs to renovate their investment. While investment property renovations offer the opportunity to increase the income and value of your property, costs can also spiral out of control. Here are five tips to achieve the biggest return on your investment.
Have a budget and stick to it.
If you’re serious about investing, you’ll be keeping track of the money you invest into the property, as well as the income you receive from it. Before work starts, consider the increase in rental income or property value that you expect from your investment property renovations. You can then create a budget based on that figure, building in a 10-20% buffer to account for unexpected expenses. Once you have your budget in place, stick to it at all costs.
Buy the most cost-effective materials.
The trick with investment property renovations is to maximize your profit wherever possible. Anything you invest in materials cuts into your margins immediately. With that in mind, you shouldn’t waste money on top-of-the-line materials that renters won’t expect or respect. Tenants view properties differently to homeowners and won’t be as inclined to look after expensive materials and furnishings. At the same time, you don’t want to pay for the cheapest materials only to find that you have to replace them six months down the line.
Be respectful of tenants and give them notice.
There’s nothing wrong with renovating a property that tenants are still living in. In fact, most of the time they will thank you for it as long as you are respectful to their situation. If you are planning on carrying out renovations, make sure you give tenants at least 60 days’ notice before you start. When possible, carry out renovations between tenants to cause as little disruption as possible.
Start with the communal areas.
The kitchen and bathrooms are most likely to catch the eye of potential renters and buyers, so start renovating these communal areas first. Tear out anything that looks dated, starting with the wallpaper and the cabinets. Appliances don’t have to be state-of-the-art, but modern cookers and microwaves can really impress prospective tenants.
Don’t forget about the front yard.
The front of the property can be a huge factor for tenants deciding between similar properties. A bit of landscaping can make your property instantly more attractive, and it doesn’t have to cost much. Cut the grass, add a lick of paint to the fence and plant some beautiful, hardy and inexpensive plants.
Need a trustworthy contractor to help with renovations? Dixon Projects is the perfect partner for property investors looking to get the most from their investment property renovations.