Finding the balance when renovating a Sydney investment property

Is it time to renovate your investment property? While a renovation may seem relatively straightforward, it’s important to plan the renovations to find the right balance between upgrading the property and not losing too much income.

As an independent property agency with decades of experience, we’ve helped with a large number of renovations in our time and it is those that find the right balance that are the most popular with tenants.

When you have an investment property in the Sydney area, it is important to consider what brings people to the particular suburb and what they are looking for in a rental ‒ is it lifestyle, proximity to work, larger properties, close to facilities and so on.

Every tenant will have their own wants and needs, but by considering what attracts tenants to the area, you’ll have a great starting point.

Is the location all it’s cracked up to be?

When you purchase a property to live in, location is a big factor. Are you near shops, schools, medical facilities, or public transport? How hard is it to get to work?

The same goes for tenants. When looking for a new rental property, location is one of the top reasons to look in certain suburbs. While you can’t move your property to these areas, you can ensure that your renovations make it attractive to those looking in your area.

For example, tenants renting homes along Sydney’s lower north shore are generally young professionals or young families. Both of these demographics will be attracted to a home that has ample storage space. The younger jet set might need more storage for clothing and shoes as they are more likely to be fashion conscious, so built ins and walk-in wardrobes are a plus, whereas young families need places to store toys and prams and want items hidden behind cupboard doors because small children have a habit of pulling things off shelves. So, know your demographic and consider how they will make best use of the space within your rental home. Or ask your real estate agent to give you some tips.

Deciding what renovations to undertake

When it comes to renovations in an investment property, it’s important to plan them so as to reduce the time your property is vacant. Doing this will mean gathering all quotes together and speaking to each individual tradesperson to find out what availability they have.

When renovating, it is also important to remember the things that would be popular with tenants, are the same things we would renovate in our own homes. Air conditioning, ceiling fans and good lighting are all good investments, and is certainly something that tenants look for and ask for. Choose hard wearing items and go for neutral colours over bold statement colours.

Kitchens and bathroom renovations

Kitchens and bathrooms are the areas where you can easily go over budget but they don’t need to be. Tenants often just want something modern, smart and easy to maintain. An investment property bathroom renovation is easy to over-capitalise on as are kitchens, so make sure you spend some time looking at all options, do your research and seek advice. Setting a budget and sticking to it is the best option when it comes to renovating kitchens and bathrooms.

Storage and work areas

Built-in storage is always appealing, particularly in smaller city apartments. Whether this be a pantry, wardrobes or simply additional storage space in a bathroom or hallway, it means tenants don’t need to worry about finding somewhere to store additional belongings. Installing a wardrobe that can double as a workspace is also a great idea.

Making improvements to outdoor areas

Everyone loves relaxing so ensuring there is ample outdoor space to place some chairs and plants is important. Don’t overdo it in this area, and if planting new plants, make sure they are drought-tolerant and don’t take a lot of maintenance.

Tax deductions for investment properties

Ensure you speak to your accountant before undertaking any work to find out what investment property renovation tax deductions are available. It’s important to have an idea of the renovation depreciation rate to ensure you’re getting the best outcome.

Do you have an investment property on the Lower North Shore? Talk to us!

Do you need advice on rental property renovations? Home Property Agents can give you advice on what tenants are looking for, and give you recommendations on local tradespeople who can help you with your investment property renovations. Get in touch – we’d love to help you out.