5 easy improvements that increase rent and get you money back at tax time
It is a common belief that landlords don’t like spending money on their properties.
And sometimes, unfortunately, this myth rings true.
National Property Buyers Senior Property Manager Ivonne Di Perna has seen 100’s of rental properties in her career and is always surprised at how many properties have not been refreshed since they were first purchased. “Some rental properties look like shrines to a past era and without the mod cons that tenants want these days, they take longer to rent and can be difficult to secure good tenants for.”
Properties that are well maintained by landlords and offer the “essentials” attract more applications and “we can take the pick of the bunch” said Di Perna when it comes to tenants. Tenants also have a tendency to stay longer and with shorter vacancy periods, more rental revenue will be achieved.
Before embarking on any improvements to your investment property – speak to your accountant and make sure that you have a clear understanding of the difference between repairs, maintenance and capital improvements and the accompanying tax implications of each. As a general rule, provided that your rental property earns income during the period, repairs and maintenance can be claimed in the tax year that they were incurred, any new assets that you purchase for the property can be depreciated and capital works deductions of up to 2.5% of the cost of any improvements may be available. Other costs may be added to your cost base at the time of sale.
NPB South Australia State Manager, Katherine Skinner explained “You don’t have to spend a fortune to present your property well” there are some “must haves” that tenants are always looking for.
So, what will get you the most bang for your buck in your rental property?
1. Leave tenants floored by your floor
Sometimes no matter how much you dry clean your carpets, they just need replacing and what should you replace them with?
There are 5 main different flooring types; carpet, floorboards, tiles, laminate and vinyl. Each with their pros and cons. For example, carpet is a great insulator and can reduce noise which makes it great for apartments and warm underfoot in bedrooms.
Di Perna recommends if you are installing carpet choose something “synthetic in a darker tone”. Whilst in our homes we might install wool carpet in rental properties “you need something durable, stain resistant and less likely to show wear and tear.”
Floorboards are durable and low maintenance option but can more expensive to lay “Polished floorboards are always popular with tenants, they look better for long, easy to clean and far more timeless than carpet or tiles” explained Di Perna.
Floorboards “are great for families and people with allergies, they will always increase the appeal of your property,” said SA State Manager Katherine Skinner.
2. Has that lime green bathroom got your tenants wearing shades?
The colour and condition of your walls can completely transform a space. A fresh coat of paint can lift your property from drab and dreary to bright and airy.
In rental properties stick to satin or semi-gloss paint for easy stain removal on interior walls. And stick to neutral colours, you want your property to appeal to the masses.
That lime green bathroom you love in your home might not appeal to everybody else.
3. Sweating in summer, freezing in winter
Having decent heating and cooling will always make your property more appealing. If people are searching for properties in summer you know the one thing they want is air-conditioning and vice versa in winter. If you don’t have adequate heating and cooling your prospective tenant pool will be somewhat limited.
Whilst traditionally in the colder areas of Australia, ducted heating is seen as the ideal heating. However, it can be expensive to install, run and maintain. Di Perna recommends “if you don’t have heating in your rental property install a split system with reverse cycle. The good quality ones are low cost and energy efficient to run.”
If you are somewhere a bit hotter, our Queensland Senior Property Manager Tracey Farrell advises “Air conditioners are a must in the Queensland Summer. As well as in the living spaces tenants are looking for air conditioners in the main bedroom, but definitely at least ceiling fans in all bedrooms. Ensure that your air con is a reverse cycle so that it also covers the odd cold day that we have.”
Farrell continues “Also screens, especially in summer, tenants are looking for properties if not with security screens then at least flyscreens. This allows them to leave windows open without the flying bugs invading.”
“And if I can sneak one more point in, window furnishings. Update your old window furnishing – even a new set of curtains will freshen up a property.” Farrell finishes.
4. First Impressions Matter
A prospective tenant’s mood can be set before they even step in the property. First impressions matter. If the exterior of your building is not up to par, a prospective tenant may not even want to come inside.
Here are some inexpensive ways to increase the curb appeal of your property:
- Weed, weed, weed
- Remove trash or debris
- Make sure the lawn and shrubbery are neat and tidy
5. Don’t put it in the too hard pile, kitchen and bathrooms
OK, so replacing an entire kitchen or bathroom can be an expensive exercise, but there are definitely some quick fixes available and can all be sorted by a quick trip to Bunnings and a booking with a handyman.
- Purchasing new knobs and handles for cabinets is an inexpensive way to makeover your room.
- Replace the benchtop. There are plenty of places around that can whip up a custom size benchtop that is durable and inexpensive.
- Replace cabinetry doors
And though Bunnings has not paid for any sponsorship of this post, they really do offer some cost-effective and quick ways to achieve all the above!
- You know a kitchen hasn’t been touched when it has the trusty standalone white Westinghouse oven and stove top. Nowadays, stainless steel appliances are very popular and gas is almost always preferred for ovens and stovetops.
- If there is space, install a dishwasher. Farrell says, “Especially in larger properties preferred by families, a dishwasher is expected as a necessity.”
So, if you want your property to be snapped up in the first open and rented fuss-free by high-quality tenants then presentation matters.
Inside pick durable low maintenance fixtures and fitting. Make sure your property appeals to the masses, stick to a neutral colour palette throughout – beiges, greys and creams. The neutral theme should extend to floors, light fixtures, and cabinets, but remember with carpets darker tones are less likely to show up stains and marks. Don’t follow trends, keep things timeless so you will not have to spend money constantly updating to the most current trend.
Ivonne Di Perna finishes, “Basic rule of thumb I like to use when a landlord is contemplating if it’s time to update the property is ‘Would you live in this property yourself in its present condition?’ ”