Refurbishment & Renovation Management
Many investors are reluctant to refurbish, afraid of over-capitalising and not getting their money back. Refurbishment should be done as a matter of course every 12 months and should be part of your portfolio strategy. A property manager worth their salt will manage this on your behalf (and we do for our clients). Refurbishment generally involves cosmetic updates to the kitchen and bathroom, painting throughout and either new carpeting or conversion to polished floorboards. A good refurbishment will not only increase the value of your property but will enable you to push up rentals, allowing you to more quickly reduce your debt position.
Should I refurbish or renovate?
- repairing/fixing an area or item,
- decorating or enhancing,
- restoring the appearance or good condition of the property.
Examples of refurbishment:
- Replacing kitchen or bathroom cabinetry or bench tops,
- Painting interior or exterior walls,
- Replacing the carpets, or polishing the floorboards.
- changes in structure,
- the replacement of an item or area of your home,
- conversions and/or extensions
Examples of a renovation:
- Add or remove walls to open or enclose rooms
- Replace an entire kitchen or bathroom area
- Move electrical or plumbing items
- Adding additional rooms to the rear or top of the property
How do I know if I should refurbish or renovate?
All properties age and deteriorate over time. The general rule of thumb for investors is to maintain the highest cashflow at all times, and the least amount of capital expenses or running costs.
The decision to refurbish or renovate your property depends on a couple of factors. One is obviously the condition of the property, and the other relates to timing.
During the lifecycle of a property, there will come time when it needs refurbishment. It might be that there's a functional item not working properly, or it might be that the look and feel has dated and is less desirable for tenants. By doing a refurbishment, which might involve new paint, carpet, cabinetry or hardware for example, you can present the property at a high standard to attract a higher rental return.