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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Rates last updated November 17th, 2019
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Name Product Interest Rate (p.a.) Comp Rate^ (p.a.) Application Fee Ongoing Fees Max LVR Monthly Payment Short Description
3.19%
3.21%
$0
$0 p.a.
80%
A competitive variable investor rate for borrowers with 20% deposits. Low fees, redraw facilities and repayment flexibility.
3.24%
3.24%
$0
$0 p.a.
80%
Get a discounted, low-fee investor loan from a convenient online lender. 20% deposit required.
3.09%
3.09%
$0
$0 p.a.
80%
This low variable rate loan comes with a free redraw account and no ongoing fees, as well as flexible repayments.
3.44%
3.58%
$0
$10 monthly ($120 p.a.)
80%
A flexible variable loan for investors. No application fee. Earn Velocity Frequent Flyer Points at settlement, monthly and every three years, plus extra bonus points for a limited time.
2.89%
3.84%
$395
$0 p.a.
80%
Investors can enjoy flexible repayments and an easy application process with this pioneering online lender.
3.39%
3.39%
$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.
3.49%
3.96%
$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.
3.65%
3.66%
$500 (if over 80% LVR)
$0 p.a.
80%
A variable investment mortgage with flexible repayments and an optional redraw facility.
3.49%
3.82%
$0
$299 p.a.
80%
Investors can enjoy a 100% offset account, a redraw facility and flexible repayments.
3.54%
4.44%
$600
$395 p.a.
95%
A package loan that offers discounts and a 100% offset account.
2.84%
3.59%
$395
$0 p.a.
80%
Pay no ongoing fees on this investment loan fixed for 3 years.
3.70%
3.71%
$0
$10 monthly ($120 p.a.)
90%
Lock in your interest rate on your investment property for 2 years. Eligible borrowers can earn Velocity Frequent Flyer Points with this mortgage, and extra bonus points for a limited time.
3.29%
4.70%
$500
$8 p.a.
95%
A flexible fixed rate loan for property investors. Borrow up to 95%.

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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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