See how to transform an apartment for $20K profit in 5 days
It’s an age old question… should your renovate your rental property now, or wait until it’s time to sell?
The answer is always renovate NOW! Whether your investment is a four-bedroom house, tiny studio or a solid two-bedroom apartment like the project I tackled recently, there’s no time like the present to get in and upgrade your property to maximise your rental returns.
But Cherie, won’t the tenants just wear it out? I hear you ask…
The answer to that is, ‘Does it matter?’. If you’re a property investor with a rental property, you’re in it for one thing and that’s a financial return. But there’s two ways to maximise your return; (a) hold your property for long-term capital growth, and (b) make sure you get the highest rent with minimal change of tenants as possible. Well, Renovating For Profit takes care of both of these.
By renovating your investment property now, you’ll manufacture equity by increasing the value of your property. That makes you more palatable to banks and lenders should you want to refinance or borrow again for your next property. Renovating also makes sure that you can ask top dollar in terms of rent. Great looking, freshly renovated rental properties are rare, so tenants will be willing to pay more to snap yours up, and they’ll stay longer, minimising rental losses you would otherwise experience in between tenants.
Recently I helped newlyweds and aspiring renovators, Richard and Linda, maximise the rental yield and uplift the value of their 2 bedroom apartment in Sydney’s inner-west. Here’s a breakdown of what we achieved in 5 days:
SCOPE OF WORKS
- Installation of a brand-new kitchen including new appliances
- New waterproof laminate floorboards throughout
- Internal painting throughout (DIY)
- Update electricals including; new lights, switches, relocation of several power points, and electrical rough-in for new kitchen appliances
- Relocate existing hot water service in kitchen
- Installation of large mirrored wardrobe in the master bedroom
- Install new window furnishings (white timber venetian blinds, curtains & rods)
- Bathroom refresh including; tile painting, new shower screen, new vanity, new mirrored shaving cabinet and new bath, shower and vanity taps
A fresh white colour scheme in Taubmans ‘Cotton Ball’, with bold feature walls in Taubmans ‘Private Jet’ give this 60s apartment a modern update. Black accessories, like curtain rods, light fixtures, kitchen cabinet handles and tap ware throughout, keep the theme consistent. This monochromatic scheme is perfect as a backdrop for fun colourful styling and accessories, from pinks to poppy yellows and aqua. It’s a smart colour scheme for rentals too because any tenant can easily see their own furnishings fitting in.
PROJECT FINANCIALS
- Property value (before renovation): $455,000.00
- Renovation spend: $ 19,376.00
- Renovation time frame: 5 days
- Property break even point: $ 474,376.00
- Property value (after renovation) $ 495,000.00
- Renovation Uplift: $40,000.00
- Net Profit Margin: $ 20,624.00 (after all costs accounted for)
RENTAL VALUATION
- Pre-Reno Rent: $ 335 per week
- Post Reno Rent: $ 430 per week
- Weekly Rental Increase: $ 95.00 per week
TAUBMANS PAINTS USED
- Internal Ceilings: Taubmans Endure Interior Ceiling / White
- Internal Walls: Taubmans Endure Interior Acrylic Low Sheen / Cotton Ball
- Internal Feature Walls: Taubmans Endure Interior & Doors Acrylic Matt Paint / Private Jet
- Internal Frames & Architraves: Taubmans Endure Interior Windows & Doors / Brilliant White
- Bathroom Tiles: White Knight Tile and Laminate Primer and Tile Paint / White
Hi there,
Wondering what you did with the shower and bathroom floors?
Also how did the kitchen work out so cost-effective? Was it because you did parts of it yourself? Thank you!!
Hi Liana – I tiled painted the bathroom wall tiles & only scrubbed the existing bathroom floor tiles to keep costs at a minimum. The kitchen was flat pack. I assembled the cabinets myself then got professional carpenters to install all cabinetry for me. Hope this helps. C x
Was it difficult for the plumber to move the piping to accommodate the new vanity? We must be doing it all wrong. We’re trying to do as much as we can ourselves and it’s still costing a bomb!
Hi Liana, no it was a really easy task to move the plumbing as the vanity was essentially in the same position. Also keep in mind that in Australia, only licensed plumbers are permitted to make plumbing changes. Please make sure you’re not doing those tasks DIY to save money. C x
How did you go about the strata approval process, particularly as you were doing a lot of the work yourself?
Hi Christie,
All approvals for the works carried out were completed prior to the reno commencing. Its really important to check with your strata when considering your reno & they will help co-ordinate your application for works to be carried out. Any works like painting, laying carpets, blinds, curtains, built in cupboards etc don’t need approval however all other works do like plumbing, electrical & any structural changes (just to name a few) do require approval & fines may be incurred if the correct application process is not followed with your Strata Manager. Cherie Crew x