Over $1.8 billion was spent on renovations in Melbourne last year, and a further $1.6 billion in Sydney. The Australian Bureau of Statistics recently reported that the suburb of Mosman alone spent a huge $76 million sprucing up their properties. According to the Housing Industry Association (HIA) State Outlook however, rental prices continue to fall, based on inflation. When the numbers don't stack up, even with interest rates stilted at historical lows, is topping up your home loan to pay for rental renovations a smart move?
We think yes.
A little nous and a lot of elbow grease is all you need to make sure you're spending your money on the right kind of DIY that will make the difference to your bottom line.
What's the Aussie focus?
Finder.com.au recently conducted an online survey of a 1,043 Australians with an aim to discover their priorities when finding a new home. According to these buyers, the top ten most looked-for features were:
As an investor, we believe you should be focusing on more fundamental features when buying a house, such as location, privacy and fencing, the number of bathrooms and bedrooms plus parking, but these 10 features help indicate areas where simple renovations could increase your rental potential.
The more demand there is for a particular feature — the more value it will add to a property
Air conditioning is a necessity
According to Australian Bureau of Statistics data, 75 per cent of Australian households have air-conditioning. As such it's important that your property does too, so you're not on the wrong side of the statistic. Installing a reverse cycle air conditioner or an evaporative cooler in your rental is advisable, particularly in the Northern Territory where over 75 per cent consider it a necessity, as reported by finder.com.au.
Parking spaces will add value
In NSW and Queensland a garage or space for parking is particularly essential. Limited street parking and exorbitant parking prices mean tenants will pay extra. Erect a carport or simply consider hiring a concrete grinder to spruce up the existing garage floor. Repair any chips or cracks where possible. Remember the garage is not just a space to park a car but where some of your tenants most prized possessions like bikes, tools and toys will live.
Spruce up the backyard
Getting the garden in good shape doesn't have to cost more than a few hours of solid DIY landscaping and the hiring of a few pieces of key equipment. A lawn roller will give your property a professional appearance and a rotary hoe will break up the soil and give life back to your plants. Kennards hires out trailers and diggers too if you're deliberating on a more extensive overhaul. Clearly a deck or pergola is a bonus feature for that indoor/outdoor flow and an entertainment area, but DIY paving can work just as well.
It's all in the details
The younger generation tends to favour homes with conveniences like a dishwasher and pool, but we'd suggest looking at less superficial improvements before these. Don't overlook ample storage, lighting and street appearance. First impressions matter and a simple repaint of a front door could be all you need for that emotional first connection with a new family.
The inclusion of garden gnomes suggest the survey was carried out by offering participants a choice of options, as opposed to features that are top of mind, but at a few dollars for one, it may just be worth it to get those potential renters across the line.
Whatever you decide to do, remember that the longer you spend renovating, the less income your property is earning. It's important to get it perfect first time so hire the right equipment from your local Kennards Hire, and we'll throw in some know-how.