Renovating for rent versus sale
If you’re investing money in a property renovation, it pays to have the end use in mind. After all, is this a home you intend to rent out to tenants or is it one you’re looking to sell?
Make no mistake, renovating for sale and renovating for rent are two very different propositions, so let’s take a deep dive into the difference between the two and the areas where a little extra attention might be required.
The big picture perspective
If you’re renovating any property, there is generally one of two outcomes in mind: capital gain (as in renovations to improve the property’s value) or rental return (improvements that are likely to increase the property’s appeal to tenants).
Depending on the intent, that may mean focussing on different areas of the property to improve, along with selecting different materials and products to utilise.
So what does this mean, and where does it apply?
Paint and style
Renovating for sale might involve drawing on the latest big-ticket trends and splashing out when it comes to paint and styling, but in the case of renovating a rental, things are likely to have a more neutral and long-term emphasis.
That’s because tenants are likely to come with their own furniture and personal taste, and the more neutral the backdrop, the easier it is for them to envisage the property as a place they can call home.
It’s a bit like a blank canvas that they can then adapt to their style without actually altering the property.
Any property will take its fair share of knocks along with wear and tear over the years, but as a landlord making renovations you will want to minimise that potential.
That means selecting construction materials and fixtures that are durable and stand the test of time, rather than reflecting the latest design trends.
For example, you might opt for a hard-wearing carpet, rather than the finest wool blend.
Bathroom and kitchen
Bathrooms and kitchens are areas of any property that both tenants and prospective buyers look at closely.
In the case of renovating for rental, it’s about refreshing the bathroom and kitchen in the interests of modernism and practicality, but it isn’t about dropping serious dollars on the latest showerheads, screens, tapware and stovetops.
Instead, look to practical and appealing improvements you can make, like the installation of a new bathroom cabinet, replacing the kitchen splashback, painting the walls, and upgrading cupboard and drawer handles.
The latest top-end stove and marble benchtops might matter in a renovation for sale, but they are less of a priority in a rental overhaul.
Instead, consider the features that are likely to draw tenants to a property, such a dishwasher, modern stove and decent (but not top-of-the-line) oven.
The bottom line
Presenting an appealing, well maintained property is important when it comes to both renting and sales, but the renovation mindset should be very different.
A rental property is one which should minimise maintenance issues and attract the right tenant. The cost of renovations is an investment weighed against the potential rental return, and any improvements will need to stand the tenancy test of time.
Renovating a property for sale, on the other hand, is about appealing to the right market of buyer and maximising the sales price. In some cases that will mean luxurious upgrades are required, in others it will be about embracing the latest trends or restoring the property to its full glory.
Ultimately, it pays to keep the end goal in mind before you start splashing out on upgrades to any property. You can learn more about what tenants want here, or find one of our friendly property managers to look after your investment.