Renovating your IP to increase rent & How much extra can you charge?

Hello,

Say you have an unrenovated 2 or 3 brm unit & you wish to increase the rent by renovating? What are the areas where you can get the best return on your dollar?

1) Install air-conditioning (Split-system) - Add how much extra per week?
2) Install new carpets in 3 brms - Add how much extra per week?
3) Renovate kitchen (ie. add new cupboard doors, door handles, & benchtops) - Add how much extra per week?
4) Renovate bathroom (ie: new tapware, vanity) - Add how much extra per week?

What are the things that tenants want & would pay extra for? It's summer now in Cairns, so a/c is worth doing.

The rent at the moment on my 3 brm unit in Whitfield, Cairns is $245pw - I think the most I could charge would be $285pw - is it worth spending $7-$10,000 doing the above & a few other things just to increase the rent by $30-$40pw.

What do you expect as a reasonable return on your money; ie. If I spent $5,000 I would expect to have that $5,000 returned to me through rent increases of $500per year over 10 years?

Sure renovating a property is going to increase the value of the property & ability to draw on that equity, however I am wondering whether renovating a property is worth the effort in the end if the extra rent isn't there? Yes, the property will probably rent quicker because it'll be like a brand new unit.

Comments appreciated. Thank you!:)
 
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We are buying a house in Corio and I have been told that if you installed a split system AC we could expect an extra $15 a week rent.

At this point in time we are just going to wait and see how the first lot of tenants go and see if they complain about needing AC before we do anything.
 
CairnsInvestor

Since your property is in Cairns and summer is almost upon us, I would be installing a split system a/c. We've put a/c in our properties in Brisbane, and have never had trouble renting them. Don't know how much extra you'll achieve in rent in Cairns, but $15 - 20 p.w. should be easily do-able. Suggest you check with a local PM, because I don't know the area at all.

Renos to kitchen and bathroom and new carpets would be great, too, but I'd be making the airconditioning top priority.

Cheers
LynnH
 
One thing I've found that can add great value is to build a laundry into the unit somewhere if it's currently a shared/common laundry area.

Putting it into the unit somewhere (even as a closet laundry in the hallway) can dramatically increase the tenant's feelings of security.
 
I'd be wanting a faster return on investment than 10 years for renos...

I think tenants want:

1. well maintained
2. clean
3. freshly painted
4. new carpet or floating floors
5. A/C
6. storage
7. good parking
8. security

Kitchens are bathrooms are expensive to redo and don't offer a good return on investment. I'd install good deadlocks, make sure all bedrooms have builtins, paint the place, replace dated powerpoints and light switches, install and A/C, replace flooring/carpet if needed.

The cosmetic renos and good cleaning - especially the bathroom will increase the yield with a minimum of expense (but some hard work)

Cheers
Pulse
 
Having recently renovated a 1br unit in Cairns on the edge of the CBD and achieving an increase in weekly rent from $135 to $195 I'd recommend you concentrate on the aesthetics of your place. New paint, new floor coverings, new light fittings, new curtains. I replaced the vanity in the bathroom and updated fittings (towel rails, mirror, etc) and also designed a new kitchen. Because the unit is small (less than 50sqm) it was relatively inexpensive. Your idea about changing benchtops and door handles etc sounds good. Maybe a new stove. The other thing I did was furnish it, with mostly secondhand gear. (CCA on Mulgrave Rd are good for that and often have ex-resort furniture). I have a great tenant who already lived in the complex and who had a peek at mine when it was nearly finished. She approached me and was prepared to pay an increased rent AND offload her own furniture to be able to stay in mine!

Good luck.
 
Having recently renovated a 1br unit in Cairns on the edge of the CBD and achieving an increase in weekly rent from $135 to $195 I'd recommend you concentrate on the aesthetics of your place. New paint, new floor coverings, new light fittings, new curtains. I replaced the vanity in the bathroom and updated fittings (towel rails, mirror, etc) and also designed a new kitchen. Because the unit is small (less than 50sqm) it was relatively inexpensive. Your idea about changing benchtops and door handles etc sounds good. Maybe a new stove. Good luck.

Hello Bernly,

Could you please tell how much you spent on the renovations to increase the rent excluding furniture added? Did you do any of the work yourself or did you employ tradespeople? Many thanks.
 
Looking at installing 2 x s/s airconds in unit + remote control for garage door which the PM says should increase the rent $20-$25 pw. I'll probably paint the place as well if the existing tenant doesn't want to pay for the increase.
 
Hello Bernly,

Could you please tell how much you spent on the renovations to increase the rent excluding furniture added? Did you do any of the work yourself or did you employ tradespeople? Many thanks.

I'll answer your 2nd question first. We did as much ourselves as we could - ripped out old kitchen and vanity, pulled up vinyl in kitchen and carpet everywhere else, painted walls and ceilings and I tiled the balcony myself because the tiler didn't turn up when he said he would. Now the costs - $669 for nearly 50sqm of tiles plus extra for grout and glue, $166 for paint, $165 for light fittings, custom made vanity, mirror & fittings plus custom made kitchen installed $5187. The tiler, plumber and electrician costs were extra. We were prepared to spend $10K as we bought the unit really, really cheaply and came in under that with furniture included. The tiles were an end lot from Allans - Minsen Beige which is a quality tile, lights were clearance stock from Lights for Less. I was careful with purchases (quality bargains!) and the result was better than even I had imagined. Oh, and I made curtains or rather re-modelled what would have been very expensive curtains that had come out of a resort. If I knew how to, I'd post photos!

Hope this helps.
 
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I'll answer your 2nd question first. We did as much ourselves as we could - ripped out old kitchen and vanity, pulled up vinyl in kitchen and carpet everywhere else, painted walls and ceilings and I tiled the balcony myself because the tiler didn't turn up when he said he would. Now the costs - $669 for nearly 50sqm of tiles plus extra for grout and glue, $166 for paint, $165 for light fittings, custom made vanity, mirror & fittings plus custom made kitchen installed $5187. The tiler, plumber and electrician costs were extra. We were prepared to spend $10K as we bought the unit really, really cheaply and came in under that with furniture included. The tiles were an end lot from Allans - Minsen Beige which is a quality tile, lights were clearance stock from Lights for Less. I was careful with purchases (quality bargains!) and the result was better than even I had imagined. Oh, and I made curtains or rather re-modelled what would have been very expensive curtains that had come out of a resort. If I knew how to, I'd post photos!

Hope this helps.

To post photos, when you post, click on the paper clip & then you can insert the photos. Love to see some before & after photos if you're willing to share.
 
To post photos, when you post, click on the paper clip & then you can insert the photos. Love to see some before & after photos if you're willing to share.

"Your file of 605.3 KB bytes exceeds the forum's limit of 100.0 KB for this filetype."
Oops! I'll try again. No luck - my pics are all too big! I'm sure there must be some way that I can downsize them but I'll have to read the manual. I have lots of photos - I can email them if you PM me your address.

Cheers
 
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I look after a number of multi dwelling blocks of units for clients who are receiving well less than the going rent for their property in its current state.

When the propery becomes vacant or the lease is up for renewal it is certainly the practise of my agency to ensure that the Principal and I inspect the property and make suggestions to the owner on what he/she should do to increase the rent by renovating or updating the insides.

In most cases the rent can be increased significantly (although as has been mentioned this will vary from area to area) especially in Brisbane where demand for tenancies is high.

Just ask your PM what they can suggest you do.
 
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