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Making improvements to a rental property is a balancing act. To get the best returns on your property it needs to be tailored to your target market, but this requires the right kind of budget, allocated wisely.
When buying a residential investment property or when a tenant puts in notice, it’s time to take stock and consider what improvements to the property could attract a higher rental return.
The first step is to speak with your property manager, who will know what tenants in the area are looking for and what features they expect for the rent they pay. In certain rental brackets, tenants may expect additional inclusions such as a dishwasher. If these are not provided, they may look elsewhere.
Meeting tenants’ expectations
Your property manager will also be able to advise you on the type of tenants who are most likely to be attracted to your property and their specific expectations. Families, for example, might only be looking at properties with a fully fenced yard, while elderly renters could be looking for safety measures such as rails on steps and wheelchair access.
Once you have all the information and a clear picture of your target market, set a suitable budget that will ensure a greater rental return without over-capitalising on the value of the property itself. Then allocate the budget carefully, prioritising only the most important improvements for your target market.
Start with the basics
While tenants will have a diverse set of needs, there are basic improvements that you can make to your property that will appeal to any future tenant. These should be at the top of your to-do list.
1. General maintenance
Ensure electricals and plumbing are in order, the property is neat and tidy, and any problems such as broken roof tiles or sticking windows are fixed. Replace all old or non-functioning appliances and make sure there are robust security locks on all doors and windows. An overhaul like this can add an increase to your weekly rent alone.
With the proliferation of mobile phones, laptops and other electronic appliances, it is important to have plenty of power points and internet connectivity options for tenants. If your property is already on the NBN (or soon will be) be sure prospective tenants are aware of this.
Ample storage is especially important in apartments. Aside from built-in wardrobes in all bedrooms, consider adding additional storage in the kitchen and bathroom and a linen cupboard if possible. If tenants see plenty of built-in storage, they can see they won’t have to move large wardrobes or buy additional storage cupboards.
Where to allocate your remaining budget
Anything you spend from your budget beyond the above items is discretionary depending on the condition of the property and what will appeal most to your target market.
Important improvements to consider might be:
- A fresh paint job throughout, using a neutral colour scheme.
- Replacing worn or stained carpets with new carpet or hard flooring.
- Adding a tool shed in a suburban property or bike storage in an inner-city property.
- Offering a garden maintenance service and factoring the fee into the rent.
- Adding an alarm system: even a local alarm can make a rental property more appealing and is cheaper than a back-to-base alarm with call out fees.
- Replacing outdated light fittings with smart, low budget modern fittings can be a surprisingly affordable and effective way to lift the look and feel of your property. Installing LED or other low power usage fittings will also appeal to tenants, as doing so will reduce their power bills
Above all, timing is important. You want to aim to achieve as much as possible within a short timeframe in order to avoid leaving the property vacant for longer than absolutely necessary.
With careful planning and key targeted improvements, you will not only gain a higher rental return but also attract more potential tenants to view and potentially apply for the property.
This could afford a greater pool of tenants, to find the most reliable and most likely to stay long term.