How to renovate a rental property to add value and improve returns

When we were scouting around to buy a rental property in regional NSW, we looked for something that had good bones, requiring minimal upkeep, in a quiet neighbourhood and built with solid construction.

While attending an open house for this property, we were surprised by the strong negative reactions others had to the house.

We heard comments such as “it needs so much to be done to it”, and “I couldn’t face the extent of renovations needed”.

But we were able to see past the obvious issues as these were mainly cosmetic, and could be fixed quickly, easily and for minimal outlay.

We also knew if we undertook a cosmetic renovation, potential tenants would be more inclined to sign on the dotted line than if we left it in its old state.

The house was built in the 1980s and it certainly celebrated the style of the era, featuring heavy curtains with gold tasselled tie-backs, pelmets, sculptured carpet, vertical blinds, colourful feature walls and tiles in the kitchen and bathroom featuring kitsch designs.

The house was on the market for $335,000 and we were able to negotiate the price down to $320,000.

Before embarking on the overhaul, we asked our rental agent to have a look. She agreed the updates we had in mind would improve our rental income as well as increase the value of the property.

• House 1, Harry and Tash: 364 New Street, Brighton
• House 2, Sarah and George: 362B New Street, Brighton
• House 3, Daniel and Jade: 362A New Street, Brighton
• House 4, Luke and Jasmin: 360B New Street, Brighton
• House 5, Jimmy and Tam: 360A New Street, Brighton

The quick ‘rental flip’

After removing the window furnishings and clearing out any other unwanted items, we replaced all taps, toilets, ceiling lights, door handles and installed modern streamline blinds. It’s these details that helped instantly modernise the house.

We had a professional painter paint all walls throughout in a bright neutral colour to improve the flow from room to room.

They also painted all the brown timber skirting boards white, painted over the “decorative” tiles in the bathroom with tile paint, and painted the kitchen benchtops and cabinetry with laminate paint.

Although we could have done a lot of the painting ourselves, we would not have achieved the slick finish or completed the job as quickly, and part of the cost can be negated by the discounts they receive on the paint itself.

We had visions of removing the carpet and replacing it with laminate timber-look flooring and installing a new flatpack kitchen. But the agent advised this would not improve the amount of rental return we would receive in this particular area.

Front door

First impressions certainly count and the entryway looked daggy and dull so we painted it all sleek black and changed the entry mat to jazz it up a bit.

After

Before

Kitchen

We removed the dated blind and applied laminate paint to cabinets and doors. Tile paint covers the daggy tiles. Door handles were replaced with sleeker modern designs. The brown timber window frame was painted white to freshen it up.

After

Before

Bathroom

Tile paint coats old 1980s design decorative tiles. The sinks, taps and toilets were replaced.

After

Before

Living and dining

The heavy curtains were removed and the skirting boards and architraves painted white to freshen them up. The feature wall was also painted the same colour as other walls to open up the room.

After

Before

The result

The initial rental income before the renovation was estimated at $310 per week. But after our $13,000 revamp, we were able to achieve $360 per week, which works out to be an additional $2600 per year.

The property also appealed to many more potential tenants, which meant less time sitting on the market, and a valuation revealed the value of the house had increased from the initial purchase price of $320,00 to $345,000.

After accounting for the cost of the renovation, that created a $12,000 uplift in value in just nine days.

Renovation cost breakdown

Sinks, toilets and taps – $1254

Doorknobs – $1213

Blinds – $278

Plants – $325

Laminate and tile paint – $542

Painter and paint – $6246

Plumber – $760

Electrician – $1550

Handyman – $275

Total – $12,443