Did you know that there’s a direct connection between a property’s overall appearance and the rental income it can generate? Likewise, a distinct relationship exists between how a property is presented and the kind of tenants it attracts.
Putting in the right and timely improvements or upgrades can result in a significant increase on the rental amount investors can charge on their property. However, you need to be aware that not all property improvements can give you additional rental income. There are some that can leave you over-capitalized. So before doing your exhaustive renovations or any excessive purchases, you should need to carefully think and plan your course of action.
Increasing your rental income is key in smart property investing and with proper planning, it isn’t as expensive or challenging as you may imagine it to be.
Below are some helpful and doable tips that could increase your rental income by as much as $5-$20/week for $1,000 or less and make your property a market winner. (Take note that these tips do not apply to all properties, but we are recommending you check and evaluate each one if it applies to you or not.)
A fresh coat of paint always works.
Renting out your property means that continuous use will leave stains, grime, and scuff marks on walls from the tenants. At the end of several years, this will certainly worsen and your property will look dirty as a whole. Perhaps, the old paint used on your property about 5-10 years ago is now pale and murky so it needs freshening up.
What will cover up all the signs of wear and tear plus scuff marks is a fresh coat of paint that will spruce up your property and make it “rent-ready” anytime.
For best results, pick trendy neutral colours which will suit the broadest market. Never paint one room purple just because that’s your favourite colour – some might not like purple and it might have a negative impact to the amount you can ask for rent, ending up with a lesser amount than projected.
The Total Cost is $500 (plus one weekend of tough tasks).
The estimated Rental Increase is $10/week.
Street parking is a much-welcome extra.
Having car parking will be a great extra, especially if your rental is in a high-density living area, such as a beachside suburb or in an inner-city. Truth be told, the nearer your place is to the city, the more value the parking space will provide to your property.
If you add a carport or maybe have a driveway in your property, this is one thing that tenants are willing to pay for, because they prefer to live in a house where parking isn’t a daily ordeal versus one where it’s not.
The Total Cost is ~$1,000.
The Estimate Rental Increase is $5-$10/week.
Storage is a valuable addition.
The tenants usually look for storage as they love it. The easy and simple additions like wardrobe closets in bedrooms add to the appeal and increase the rental value. Tenants usually imagine themselves living in a space but if they can’t find ample room for their belongings — it can be a deal-breaker.
You can choose from budget-friendly stores like Bunnings and Ikea which provide wide-ranging options for various storage solutions that are not pricey but look appealing to the renters.
The Total Cost is ~$1,000.
The Estimated Rental Increase is $5-10/week.
A bathroom makeover is essential.
If you get tired of the colour of your house, would you consider constructing a new one by tearing everything down? This would cost you a lot.
Sadly, many would have this penchant for upgrading their bathrooms as a whole once they get tired of the colour.
The bathroom is a crucial area of every investment property but every so often ignored. In many instances, one would refuse a property for rent once they see that the bathroom is dated or terrible-looking. Baths are essential for families and young professionals normally go for large walk in showers.
Below are some easy makeover considerations that can turn a typical bathroom into a property gem for under $1000 and help increase your rental income.
- Apply a fresh coat of paint. – Buy paint and apply it directly in the shower and tiles. The old, dirty tiles will look as good as new after a dose of paint. White paint usually works great in bathrooms since the white colour evokes a tidy and fresh feeling so you can never go wrong with it ($400).
- Remove mould and flakes. – You can make your bathroom more attractive without any dirt like mould and flakes before the actual painting job. Remove off the flakes by sanding them and clean away any mould you see. People will pay more for living in a completely clean and tidy home with a spic and span bathroom. ($30).
- Replace the shower curtain. – Tenants usually leave their shower curtain as is, but nobody likes to display and use an old, musty shower curtain, right!? Furnish your property with a new curtain, preferably in a neutral colour. Do not go for the usual colourful starfish-designed shower curtain which the kids would love but is not for everyone ($10).
- Refurbish the vanity unit. – A bathroom will usually have a worn-out vanity kit. Often, it is full of dirt and door handles and drawers are either broken or missing. Do a makeover of the vanity unit by painting it and replacing the broken handles of doors and drawers with new and modern sets. Overall, fix everything that needs to be fixed — this is the point. This will make a big impact to the bathroom’s total appearance ($100).
- Make room for new showerheads and taps. – Aside from the showerhead and vanity unit – the condition of the bathroom’s sink tap and adjoining handles are most of the time untidy, dated, and with minor defects. It is inexpensive to bring in new stuff. You do it so that your currently dated bathroom will look better – new, fresh, modern and looking more lavish. ($300).
The Total Cost is $840.
The estimated Rental Increase is from $10-$20/week.
What’s needed: a NEW carpet
You should provide a new carpet if your old one is already dilapidated and ugly. To turn a small unit into a more desirable one for new tenants, re-carpeting costs less than $1,000 only. But if your property is a bigger home, it is quite impossible to change your carpet for lower than $1,000.
Usually, the carpet will display the most wear and tear in places of high traffic at home like the walkways and lounge room. If the carpet looks worn-out and has served its purpose on these areas, replace them and give the carpets in the bedroom an extensive clean so they would appear spotless and look as if they’re new.
The Total cost is about $1,000.
The Estimated Rental Increase is $5-10/week.
Provide a dishwasher in the kitchen.
A ready dishwasher in your property’s kitchen will earn high points for your property. There are very few who will not respond positively to a dishwasher, and who will not evade a property lacking a dishwasher.
It will cost you around $650 to buy a brand-new dishwasher, including installation cost (unless you need to overhaul the plumbing and kitchen significantly). A second-hand dishwasher can be bought at eBay for around $150-$300 and you can install it yourself if you’re handy and practical.
The Total Cost is $650.
The Estimated Rental Increase is $5/week.
Must Haves: Dryer and Washing Machine together.
Most tenants, particularly the unit renters do not have both a dryer and a washing machine. Often, they’re used to only having a common laundry within their floor or the entire building which is being shared with co-tenants. Providing your renters with both a washing machine and a dryer in their unit means that your rental income will increase as a likely outcome.
If there’s a spot where a washing machine is to be perfectly placed, that’s great! But if there’s none- then you can have them situated in kitchen cupboards. A space-saver — the tenant can close the door of the cupboard and the laundry becomes not visible to anyone.
A Kitchen makeover is appealing.
The bathroom is considered one of the most important rooms of the house, but the kitchen is the MOST important one. Why? They often say that an attractive kitchen sells a house, which is also often true for renting. A good kitchen makes for a rentable house and thus, you can get more money out of it.
Generally, it would appear that people have the same attitude for both the kitchen and the bathroom. What it means is that whenever you want a fresh look, the tendency is to demolish everything and start new. Plus, spend an estimated $30,000 in the process.
A simple ‘kitchen makeover’ can considerably increase the attractiveness of your kitchen and the rental price you can demand for your property.
Listed below are the items you need to include in your kitchen makeover:
- Paint the cupboards and splashback tiles – There’s available paint you can buy that can be applied to both your doors as well as your faded splashback tiles. Refurbish your kitchen by painting anew with a fresh coat of colour. White typically often do well in making one’s kitchen look tidier and more appealing ($300).
- Get new accessories for doors and drawers – Replace your old doors and drawers with new and modern accessories. For single-knob handles, replace them with long handles instead. Just cover and paint over the old handle hole and make new holes next for your handles ($200).
- Replace the Taps – If the taps of your sink are dirty, old, and partially broken, then spend for their replacement. It’s best to keep the kitchen looking modern and upgraded and this will pay off in the long run ($200).
- Buy a new Stove/Oven (can be 2nd-hand) – If you have an almost 10-year-old (or older) stove/oven, then it’s time to purchase a new one, an affordable one from perhaps, eBay. The old unit tends to degrade the overall look of your kitchen ($300).
- Enhanced Flooring (can be optional) – When you have the old vinyl type of flooring, this might be a reason why it could be pushing down the price you can demand. If you replace it, you will enhance both the look and feel of the kitchen, thus, the rental income is most likely to increase too. The upgrade need not be too over-the-top, a neutral colour–themed flooring is always a wise and practical option ($600).
The Total Cost is $1,000.
The Estimated Rental Increase is $10-$20/week.
Raising the Rent – what to consider?
In your research, you may discover that you’re asking rent is below the market standards, thus, it is recommended that you raise it.
Most investors feel uncertain about increasing the rent as they could lose renters. But when you are charging rent that is at par with market value, then tenants will know that it will be useless to look for other similar properties since the prices are almost the same or even higher, unless they are intending to downgrade. Your property manager should be able to give you the best advice on what would be a reasonable increase to charge for your property.
Investors can also increase their rent if they fulfill the following: have a house with good appliances, new fittings, and helpful extras. Tenants are expected to pay more for these so raising the rent will be easy.