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Renovating to add value to your investment property

The secret to adding thousands of dollars of value to your investment property

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Buying an investment property is one thing; making the most of it is quite another. The important thing to remember is that there are some simple steps you can take to add to your property's value, so when it comes time to rent it out or to sell it you can look forward to greater returns.

Research before you start

Before you get started, carry out some research to find out what prospective buyers look for in the neighbourhood. A good way to do this is to get in touch with local real estate agents and ask what buyers of your particular property type are looking for. You may find that borrowers in your suburb who are buying two bedroom units are looking for car space and extra storage space. This gives you a clear indication of where to focus your efforts.

When making changes, remember that your personal tastes are just that—personal. As a result, make sure your renovations aren’t limited to what you find appealing, because one man's meat might well be another's poison.

9 ways to increase your investment property's value

  1. Paint. A fresh coat of paint, on the outside and the inside, can make a significant difference to the appearance of a home. It's best to stick to neutral colours in order to attract more buyers.
  2. Landscape. While you might not enjoy gardening, a well-kept lawn and garden definitely up the value of a home and will also tell prospective buyers that you've taken care of the house. Don't forget to fix the fencing if it requires attention.
  3. Fix the roof. Most regions in Australia witness heavy rainfall and this can take a toll on roofs. If your roof is more than 15 years old, it might require a complete overhaul. Otherwise, check the rook thoroughly for leaks and replace all damaged shingles.
  4. Fix flooring. Dirty and frayed carpeting is a turn off, as are chipped floorboards and tiles. Besides, a fresh coat of paint with dirty flooring just doesn't match. You don't have to go overboard, just make sure the floor looks clean and presentable.
  5. Renovate the bathroom. A number of sales don't go through simply because prospective buyers are not happy with the state of bathrooms. Make your bathroom look as inviting as possible, even if it means investing in new fixtures. If you cannot clean grime from tiles, consider replacing them. If the paint in the area is old and dated, repaint it.
  6. Renovate the kitchen. Like the bathroom, a poor-looking kitchen can be a deal breaker as well. Again, you don't have to spend huge amounts to make your kitchen look good. To deal with old cupboards, you can paint them or just replace the doors. With this done, consider adding new handles. If the kitchen bench looks old, replacing just the bench top can serve the purpose you want. Replace old, leaky and rusty-looking taps.
  7. Furnish. Furnishing a home can be a great way to boost rental income, although it requires you to invest some money in the beginning. By adding a little in the form of furniture, you can look forward to short-term renters who don't mind paying higher rents so that they don't have to worry about furnishings.
  8. Add extras. Many renters look for homes with air conditioners, so simply adding an air-conditioning unit can help increase weekly rent. Adding a dishwasher can do the same, as can installing a washing machine.
  9. Add storage. Functional storage space is what many renters look for and this can come in the form of built-in wardrobes as well as backyard sheds.

Learn more about home renovation here

Spending some money to add value to an investment property is a good idea, but it's important that you don't overspend, because typically high expenses might not be easy to recover. What's also important, though, is that you don't cut corners or look for substandard solutions.

Funding your property upgrade

It costs money to renovate a property. If you don't have the necessary cash to spare, you could take out some of your property's equity in the form of a line of credit loan. You essentially take some of the value out of your property and then repay what you spend over time, plus interest.

How to use your property to finance a renovation

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Name Product Interest Rate (p.a.) Comp Rate^ (p.a.) Application Fee Ongoing Fees Max LVR Monthly Payment Short Description
UBank UHomeLoan Variable Rate - Discount Offer for Investor Variable P&I Rate
2.89%
2.89%
$0
$0 p.a.
80%
Get a discounted, low-fee investor loan from a convenient online lender. 20% deposit required.
Athena Liberate Home Loan - 70% to 80% LVR Investor, P&I
2.79%
2.74%
$0
$0 p.a.
80%
A competitive investor variable rate that falls as you build equity.
homeloans.com.au Low Rate Home Loan with Offset - LVR 60% to 80% (Investment, P&I)
2.54%
2.56%
$0
$0 p.a.
80%
This investment loan keeps fees low, has a sharp interest rate and comes with a 100% offset account. This loan is not available for construction.
Newcastle Permanent Building Society Fixed Rate Home Loan - 1 Year Fixed (Owner Occupier, P&I)
2.49%
4.12%
$595
$0 p.a.
90%
$2,000 refinance cashback
Investors can take advantage of a short term fixed rate with no ongoing fees. $2,000 cashback for eligible refinancers borrowing $250,000 or more.
UBank UHomeLoan - 1 Year Fixed Rate (Investor, P&I)
2.29%
2.84%
$395
$0 p.a.
80%
Investors can enjoy flexible repayments and an easy application process with this pioneering online lender.
Athena Evaporate Home Loan - 60% to 70% LVR  Investor, P&I
2.74%
2.71%
$0
$0 p.a.
70%
Athena's refinance offer for investors and owner occupiers.
Pepper Money Essential Prime Full Doc Home Loan - LVR >75% up to 80%
3.09%
3.29%
$599
$10 monthly ($120 p.a.)
80%
This is a competitive, flexible variable rate suitable for borrowers with a good credit history. Borrow up to 80%.
Athena Celebrate Home Loan - 60% LVR  Investor, P&I
2.69%
2.69%
$0
$0 p.a.
60%
Investors with large 40% deposits or equity can get this low variable rate. A competitive option for investors looking to refinance.
IMB Fixed Rate Home Loan - 3 Years Fixed (LVR ≤90% Investor, P&I, NSW and ACT borrowers only)
2.64%
3.56%
$449
$6 monthly ($72 p.a.)
90%
NSW and ACT customers only. A 3 years fixed rate investor which allows extra repayments to be made.
Macquarie Bank Basic Home Loan - LVR up to 70% (Investor, P&I)
2.79%
2.79%
$0
$0 p.a.
70%
Investors with a 30% deposit can get this low rate loan to fund their property portfolio. Take advantage of split and redraw facilities.
UBank UHomeLoan - 3 Year Fixed Rate (Investor, P&I)
2.29%
2.74%
$395
$0 p.a.
80%
Pay no ongoing fees on this investment loan fixed for 3 years.
ING Orange Advantage Loan - $150k to $500k (LVR ≤ 80% Investor, P&I)
2.74%
3.08%
$0
$299 p.a.
80%
Investors can enjoy a 100% offset account, a redraw facility and flexible repayments.
UBank UHomeLoan Variable Rate - Investor Extra Offer Investor Interest Only
3.29%
3.16%
$0
$0 p.a.
80%
Pay interest only repayments with this special offer for investors.
Athena Variable Home Loan - Investor, IO
2.99%
2.81%
$0
$0 p.a.
80%
A competitive interest-only investor rate with no application or ongoing fees. Requires a 20% deposit.
UBank UHomeLoan - 1 Year Fixed Rate (Investor, IO)
2.44%
2.85%
$395
$0 p.a.
80%
Investors can enjoy flexible repayments and an easy application process with this pioneering online lender.
Pepper Money Essential Prime Alt Doc Home Loan - LVR up to 55%
3.85%
4.04%
$599
$10 monthly ($120 p.a.)
55%
A competitive rate home loan with an offset facility for self-employed borrowers.
UBank UHomeLoan - 5 Year Fixed Rate (Investor, P&I)
2.74%
2.83%
$395
$0 p.a.
80%
Lock in a 5 year fixed rate on your investment loan and pay no ongoing fees.
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Credit services for Aussie Select, Aussie Activate and Aussie Elevate products are provided by AHL Investments Pty Ltd ACN 105 265 861 (“Aussie”) and its appointed credit representatives, Australian Credit Licence 246786. Credit for Aussie Select products is provided by Residential Mortgage Group Pty Ltd ACN 152 378 133, Australian Credit Licence 414133 (“RMG”). RMG is a wholly-owned subsidiary of the Commonwealth Bank of Australia ABN 48 123 123 124 AFSL and Australian Credit Licence 234945. Credit for Aussie Activate products is provided by Pepper Finance Corporation Limited ACN 094 317 647 (“Pepper”). Pepper Group Limited ACN 094 317 665, Australian Credit Licence 286655 acts on behalf of Pepper. Credit services for Aussie Elevate products are provided by AHL Investments Pty Ltd ACN 105 265 861 Australian Credit Licence 246786 (“Aussie”) and its appointed credit representatives. Aussie is a trade mark of AHL Investments Pty Ltd ABN 27 105 265 861. Credit and any applicable offset accounts for Aussie Elevate are issued by Bendigo and Adelaide Bank Limited ABN 11 068 049 178 AFSL / Australian Credit Licence 237879.

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Logo for Westpac Flexi First Option Home Loan - Basic Variable Rate (Owner Occupier, P&I)
Westpac Flexi First Option Home Loan - Basic Variable Rate (Owner Occupier, P&I)

Up to $3,000 refinance cashback. A flexible and competitive variable rate loan. Eligible borrowers refinancing $250,000 or more can get $2,000 cashback per property plus a bonus $1,000 for their first application. Other conditions apply.

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St.George Basic Home Loan - LVR 60% to 80% (Owner Occupier, P&I)

Up to $4,000 refinance cashback. A competitive variable rate loan from St.George. Refinancers borrowing $250,000 or more can get $4,000 cashback (Other terms, conditions and exclusions apply).

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Athena Liberate Home Loan - 70% to 80% LVR Owner Occupier, P&I

A competitive variable rate mortgage for owner occupiers $0 application and $0 ongoing fees. This interest rate falls over time as you pay off the loan.

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UBank UHomeLoan Variable Rate - Discount Offer for Owner Occupiers, Variable P&I Rate

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