Monday, 15th of February 2021
It’s a bit of an anxious time for the Perth property market at the moment. Tenants are currently finding it hard to secure rentals through all-time low vacancy rates, however, if you are the owner of an investment property in the Perth market, you are in a position of opportunity due to a series of time-specific factors.
As the loaming March 28th 2021 deadline approaches to signal the end of the Residential Tenancies (COVID-19 Response) Act preventing evictions and rental price increases, landlords should now be considering how best to position their property for maximum returns and growth.
Thanks to record low interest rates, booming mining activity, growing consumer confidence, and various government stimuluses, it is a great time to consider property renovations that can be implemented now ahead of the moratorium restrictions being lifted.
We explore some of the ways in which investors can introduce home renovations into their Perth investment property, which will not only drive rental returns, but also create a more comfortable, liveable and enjoyable home environment for ongoing and future tenants.
Maximising Rental Returns Through Renovations
As we covered in our previous article, Investing In 2021 – Why WA Property Is Poised For Growth, property experts are tipping rental increases between 10-15% once the March 28th deadline has expired. If you are the owner of an investment property here in Perth, you may be in a position to increase your rents from this date forward. With minimal rentals available and tenants still searching for quality properties, it’s a simple case of low supply and high demand placing upward pressure on prices.
Property investors can either rely on the market driving up prices organically, or, the other option is introducing well-timed renovations that create more functionality, comfort, and liveability, thus further driving property values up and providing an opportunity to seek higher weekly rental returns.
Home renovations have peaked since the first wave of COVID-19 hit the Perth property market, with a huge spike in demand eventuating from owner occupiers spending more time at home, and property investors seizing the opportunity to improve and update their current portfolios.
As covered in a recent article by local Perth renovations experts, Nexus Homes Group, 2021 is the year for home renovations in Perth.
Renovations To Enrich Lifestyle And Liveability
Careful consideration, planning and budgeting in the right places can all help to introduce economical ways of drastically improving the value of your property, without breaking the bank. Since the internal areas are where residents spend a majority of their time, this is the most logical place to start when considering improvements.
From large-scale renovations like extensions and second-storey additions, through to simple introductions of functionality like ceiling fans, extra pantry space and built-in robes, the options are always guided by your budget. However, as explained by Perth Property Management’s Director, Kristy Copping, the secret is thinking like a tenant rather than an investor.
“I recommend putting yourself in the shoes of your tenant and contemplating what additions and improvements would improve quality of life, whilst making things easier and more comfortable. At the end of the day, it’s your tenants who will see the immediate benefit of your renovation, so base your decision-making around their day-to-day needs.”
Depending on your budget and the scale of project you’re willing to undertake, the list of potential renovations options is endless.
Low Scale Home Renovations
- A fresh coat of paint and new window treatments in master bedrooms.
- Updating kitchen appliances, tapware and handles with a modern look.
- Cleaning (or replacing) carpets/flooring as needed in common areas.
- Introducing new light fittings, switches and dimmers throughout the property.
- Adding home automation appliances for convenience, comfort and security.
Large Scale Home Renovations
- Knocking out walls to extend rooms and introduce freedom and space.
- Fully converting your closed-off kitchen to a modern, open-plan orientation.
- Boosting your curb appeal with a contemporary redesign of your front façade.
- Revitalising outdoor patios and decking to create a peaceful backyard ambience.
- Introduce new bedrooms via a second-storey or ground floor addition.
Low scale renovations can be extremely efficient in improving the cosmetic feel and ambience of your property with minimal investment, however, as Kristy explains, large-scale renovations are where the largest opportunities exist for really boosting property values.
“Improving functionality, liveability and comfort should always be the highest priority when looking to add value to your property, and large-scale renovation projects are where you get the most bang for your buck.
Introducing additional bedrooms are the most profound way of instantly increasing your rental returns, and renovating common areas such as the kitchen and bathrooms can also add huge value as this is where tenants spend a large amount of their time when home.”
– Kristy Copping (Director | PPM)
Before You Get Started…
Depending on the scale of your renovation, there are certain considerations which may need to be taken into account before you embark on a project. For example, large scale renovations like adding a second storey or knocking down walls to create a ground floor extension, will ultimately require council permission before you start.
If you’re adding another property to your current block, you will need to check your local council R-code to ensure you are eligible to sub-divide your block to turn into multiple properties - and multiple rent returns.
If you’re working towards a renovation before the end of the March 28th moratorium deadline, you’ll definitely have to get your skates on!
Helping Clients Navigate The Dynamic Market
It’s no secret that renovations help to revive and transform properties into more functional, comfortable and liveable spaces for residents. With careful planning and a considered process towards your tenants needs, you can introduce the right style of renovation to maximise the value of your property, whilst boosting your potential for maximised returns in 2021.
The team here at Perth Property Management are well-versed in providing our investors with guidance and support when considering renovation projects, and thanks to our experience servicing the Perth market, we know how to drive value and growth to get the very best for our clients.
Get In Touch
If you are unhappy with your current property management provider and wish to switch to an award-winning agency like PPM, we welcome your call, or you can check out our latest blog which addresses the question, How Hard is it to Switch Agencies or Property Managers?
We welcome you to get in touch with us today if you are interested in discussing how we can improve your property’s value, or if you are simply in need of guidance ahead of the projected rental price increases.
