In this day and age, a $20,000 renovation budget won’t get you terribly far. So where should you put your hard-earned dollar?
The Goal
I’m a big believer in the “goal drives the strategy” approach. What’s your goal? Is it to increase cash flow, increase equity, sell or is it simply
maintenance?
Once you are clear about your desired outcome, then chat with the respective parties involved.
- If your goal is increasing cash flow, ask your tenant what they would pay more for.
- If you want to increase your equity position and add value, chat with your valuer. Why not take them out to lunch and pick their brain? It’s cheap
advice. - If you plan to sell, ask a few real estate agents or your listing agent what their buyers are after. Don’t assume that you know what will work:
be open to advice. You don’t have to take it, but you do want to be making an informed decision.
The traditional renovation always includes the kitchen and bathrooms, but you need to be able to validate your decision. Will the investment of a $10k
kitchen give you a multiplied return on the investment or should you just replace the faces?
Another factor that you may like to consider is rentability. Rundown homes tend to attract rundown tenants. If you want to attract a house-proud
tenant who will take care of your property, pay on time and in full, then you will need to have a home that attracts that type of person. You may
get away with old carpet, but a couple of coats of wall and ceiling paint will likely lift the house and make it feel more like a home.
