To reno or not to reno?

[Ricky Tarr]

I've a place in Ipswich that is crying out for a new bathroom and kitchen (and probably re-painting inside). I've been meaning to spend about $10k on renovations/maintenance for a while, including the kitchen, bathroom, fencing and installing air-con.

Trouble is, every time I put the rent up, the tenants sign the new lease without a murmur. I've got great long(ish)-term tenants who pay on time and look after the place, and they haven't complained about the kitchen or bathroom, even though they're starting to fall apart.

When should I bite the bullet and do some work?!

 

[nhg]

Ask them if they are willing to pay $10-20/wk more for a reno.

Small enough not to hurt them and you can revalue for increase in equity so win-win.

 

[Ricky Tarr]

Yeah, I think I will do the reno with 4 months left on the lease and we're coming into summer, then jack up the rent by $20 and remind them about the nice new kitchen and airconditioning...

First world problems I guess!

 

[Ski-bum]

What is your reason for renovating? eg. for cashflow (increasing rent), equity reval or to attract better quality tenants?

 

[Ricky Tarr]

What is your reason for renovating? eg. for cashflow (increasing rent), equity reval or to attract better quality tenants?

To stop the place falling apart altogether... and hopefully cashflow

 

[travelbug]

If there are maintenance isasues I'd do them but financially it is not worth spending money oin a new kitchen and bathroom to achieve $20 extra rent.

Remember the new bathroom and kitchen start aging so if you want to sell in say 10 years, they need doing again.

I'd say just leave it until the tenants leave or when you want to sell (whichever comes first).

 

[wylie]

Yeah, I think I will do the reno with 4 months left on the lease and we're coming into summer, then jack up the rent by $20 and remind them about the nice new kitchen and airconditioning...

If there are maintenance isasues I'd do them but financially it is not worth spending money oin a new kitchen and bathroom to achieve $20 extra rent.

Remember the new bathroom and kitchen start aging so if you want to sell in say 10 years, they need doing again.

I'd say just leave it until the tenants leave or when you want to sell (whichever comes first).

I would do as travelbug suggests and do the work once these tenants leave.

I don't think you would get much quality in a kitchen, bathroom and internal paint renovation that costs only $10K. I would have thought (unless you buy a good second hand kitchen) that new kitchen, bathroom and internal paint would be $20K(ish) - unless you do the painting yourself.

For that outlay, I would be wanting considerably more than $20 per week increase.

Just adding air-con should return you about $15 per week increase (depending on where the IP is).

A year ago, we did new kitchen, new bathroom, internal paint, polished floors and rent went from $400 to $500 per week (Camp Hill).

 

[Ricky Tarr]

Thanks guys - there's no rush, so if there's no complaints and it's not a safety risk I don't need to do anything too soon.

Air-con sounds like a better investment.

 

[marg4000]

You can hardly rip out a kitchen and bathroom to renovate while tenants are living in the property.

Wait until they leave.
Marg

 

[Rentwithpets]

You can hardly rip out a kitchen and bathroom to renovate while tenants are living in the property.

Wait until they leave.
Marg

Totally agree, been there done there with my own home while I was living in it. Don't want to do it again. Why disturb a tenant's life with the dust, mess, shuffling furniture etc unless I can find them somewhere else to live while the dusty work was happening? If the tenants ask for it then I would do the work and easier to justify a rent increase.

 

[Jacque]

You can hardly rip out a kitchen and bathroom to renovate while tenants are living in the property.

Wait until they leave.
Marg

Ditto. Fair more practical and easier if you can manage to wait til they vacate and then manage this way. Been there done that