One of the more difficult aspects for many investors to overcome when planning a renovation is deciding what exactly will add value their investment and what will not.
It is important to recognise that increased value for the investor can come in the form of increased rents, reduced vacancies and increased property value. A clear objective or one or more of these should be established at the outset. That being said, we provide the following brief overview as to what does add value and what definitely does not.
- ADDING VALUE BY INCREASING AMENITY
Increasing the number of bedrooms, living rooms or bathrooms will increase both the rental income and property value of a given property. With careful planning and clever design, these alterations should be achieved within the existing footprint of the property for maximum impact on values, wherever possible.
- ADDING VALUE BY INCREASING COMFORT
Increased rental income will always be achieved where tenants can see the value in what they are paying for. Ensure that your property addresses the potential concerns of those who might live there – Heating, cooling, natural light, appliances (such as a dishwasher) & security all rate highly and should not be overlooked when planning renovations.
- ADDING VALUE BY MODERNISING
Often inexpensive to implement, do not overlook the impact of modernising the visual appeal of a property with cosmetic updates. Paint, light fittings, window dressing & floor coverings can all be updated for relatively little cost compared to the lift that they can provide to the appearance of a property and therefore to its appeal to tenants.
- AVOID THE UNNECESSARY
It is easy to go overboard and ultimately spend money on updates that are unnecessary. Always ask yourself, if an alteration is really required. For example, if the shower screen needs replacing, that does not necessarily mean that the entire shower needs to be replaced. Installing central or hydronic heating? It does not necessarily follow that the existing heating source needs to be removed.
- DON’T BUTCHER YOUR EXISTING FLOORPLAN
Whilst it is great to add extra spaces (bedrooms, bathrooms etc) where possible, don’t go to the extreme of creating an unworkable floor plan just to achieve this objective. Any alteration must make sense.
- IF IT’S #OTT LEAVE IT O.U.T!
When renovating or updating investment properties, the objectives are different to when we renovate our own homes. Unless your investment is a luxury property, there is no place for the addition items such as a pool or spa, where one does not already exist. These items do not add value proportionate to their cost to install.
Starting with a clear plan as to your objective will provide you with the best guide as to what to include and omit as part of any investment property renovation. Sticking to your plan will ensure your renovation is a success.