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Top tips for renovating in 2023

By Siobhan Robinson

Our investor clients often ask when the best time is to renovate their investment property. 

Experience tells us that the best time to renovate is when the property is vacant, however some renovations can be done with tenants still in the property. Obviously, this is dependent upon the renovations to be undertaken.

Renovations undertaken during a tenancy can encourage a tenant to enter into a longer term lease at an increased rent or to maintain the property at a liveable standard without the need of creating a vacancy.

Renovations do not necessarily mean gutting the property in total. Renovation could be the installation of built-in wardrobes, upgrading bathroom tiling and shower/bath recess, painting, new window coverings, re-carpeting and the installation of a new kitchen or appliances.

We stress that it is unwise to over capitalise by installing top of the range products. This is a mistake that many investors make. Top of the range products not only cost more, but do not necessarily add rental value to the property.

Be careful when considering renovations and take the advice of your property manager as to what type of renovations will increase the rental value and what tenants actually desire in their search for a rental property. By knowing what the renting public are looking for and tailoring your renovations to market expectations you are spending your time and investment dollars towards deriving additional income and not simply improving your property.

Remember to retain all records and invoices. Speak to your accountant as to the tax implications of any renovation work that you undertake and also consider obtaining a tax depreciation report so your renovations can be depreciated for tax purposes.

Be careful when considering renovations and take the advice of your property manager as to what type of renovations will increase the rental value and what tenants actually desire in their search for a rental property. By knowing what the renting public are looking for and tailoring your renovations to market expectations you are spending your time and investment dollars towards deriving additional income and not simply improving your property.

Remember to retain all records and invoices. Speak to your accountant as to the tax implications of any renovation work that you undertake and also consider obtaining a tax depreciation report so your renovations can be depreciated for tax purposes.

Key Takeaways:

  1. Best time to renovate is when property is vacant, but some renovations can be done with tenants inside depending on the type
  2. Renovations can make tenants pay more rent or stay longer, or avoid vacancy
  3. Renovations can be simple or partial, such as adding or improving closets, bathroom tiles, paint, curtains, carpets, kitchen or appliances
  4. Don’t over spend on fancy products that won’t increase rent value
  5. Ask property manager what tenants want and what will make property more attractive
  6. Keep receipts and invoices, talk to accountant about tax effects and get tax depreciation report

2023 Renovation Trends:

Let there be light

Architects and designers insist natural light be prioritised. Full-height windows, wraparound glass doors and skylights are being used to transform homes. Today’s buyers love floor plans that integrate the interior with the natural elements. Inviting as much natural light as possible into your home is a great place to start.

Keep it natural

Environmental themes have dominated modern buildings and renovations in the plast few years, and there’s no sign of this changing. The hallmark of high-quality upgrades is the use of natural stone and timbers.

Great outdoors

Patios, pool areas, balconies, and outdoor entertainment areas are all high-demand renovation features this year. Modern additions, such as outdoor kitchens, glass fences and ornate stone pavers, are popular with architects. Again, they’re embracing the concept of creating synergies between indoors and outdoors. 

Working at home

The home office is here to stay. While many workers have now returned to their office spaces, homeowners still want to carve out a dedicated space for their jobs to help ensure they have their desired work-life balance. While some are converting a bedroom, be cautious about this move as the number of bedrooms in a home has a huge influence on value. An alternative approach is to build an extension.

Be energy efficient

Enhancing the sustainability of your home won’t just reduce your energy bills but it will also prove to be a big winner with buyers when the time comes to sell. With electricity prices forecast to increase from July, this has become an even more important facet of a renovation. Designs that encourage passive heating and cooling will enhance the value of your home.

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