Successful investors regularly assess their portfolio for potential improvements to enhance tenant appeal, increase rental income and grow the capital value of their assets.
A keen eye for potential improvements is a valuable asset when inspecting rental properties to buy. Take notice not just of the quality of the building but any simple, low-cost potential enhancements that might increase rental income.
Here are some ideas for you to consider when evaluating your existing properties and extending your portfolio.
1. Extra bedroom
Whether you’re looking at a house or apartment, make a note of oversized rooms. These can be re-made into two bedrooms. Large master bedrooms and attics often hold opportunities. Bedrooms are pivotal in determining the rent. But make sure the new room can handle a double bed and wardrobe.
2. Building codes
Structural work is not always so easy with an apartment. Check the strata or body corporate rules and building codes before you purchase or instruct a tradie to pick up a sledgehammer.
3. Add a half-bath
If the bathroom needs renovation, remove the shower and install a half-bath with a shower unit. A smaller sink and toilet might also create the space you need. Use the current plumbing layout as moving pipes gets expensive and will lower your return on the investment.
4. Laundry ideas
Some older apartments don’t have plumbing for a laundry. If there’s no obvious location for a washing machine, position it in a kitchen cupboard. Install connections for a front-loader but think about whether you should provide the washing machine. A higher rent should compensate you if you do.
5. Kitchen upgrade
A quality kitchen will drive up potential rents. Replace a damaged benchtop and replace the doors and handles of the cupboards and drawers so prospective tenants will believe they’re walking into a new kitchen.
6. Water woes
Check the age of the water heater, which has a lifespan of 10-15 years.
7. Floor your tenants
Great flooring impresses tenants and can let you charge additional rent. Fresh carpet is excellent, but many tenants prefer a timber floor. This upgrade is worth consideration.
Top everything off with a fresh coat of paint. Keep your colours neutral and consistent. Note the paint colours as you’ll need them for touch-ups and redecorating between tenants.