Investors have re-entered the residential real estate market across the country, withdrawing funds from equity markets to purchase property at rock-bottom interest rates in the hope that prices will continue to rise.
However, wise buyers, according to buyers’ agent Emma Bloom, choose houses or apartments that they know they can improve to add value.
“That is a certain way to make your money work harder for you,” Bloom, director of the agency Morrell and Koren, explains.
“If you purchase a completely finished product, you must ensure that it is located in a high-growth area in order to profit from it.
Many people are now purchasing investment properties to renovate, rent out immediately, and possibly use later to provide their children with a foothold in the property market. As a result, they want to ensure the properties’ long-term viability.”
They can accomplish this in a variety of ways.
Cosmetic changes, such as cleaning, painting, and refinishing flooring, can be inexpensive but have a dramatic effect.
Interiors expert Andrew Loader of his eponymous design firm in Sydney always recommends repainting spaces in neutral colors to make them appear larger, brighter, and lighter.
“This can make even small spaces appear much larger than they actually are,” he explains.
“Flooring is also critical. It must look good while also being durable and hard-wearing. While carpets require frequent cleaning, hard wood or tiled floors are always a good choice for investment properties.”
“Adding storage can also increase a home’s appeal to tenants. Many older homes and apartments lack adequate storage or were built during the era of free-standing wardrobes.”
Window dressings, awnings, and flyscreens that are out of date can also age a property and make it appear much darker than it should, advises Sara Chamberlain, director of Melbourne’s The Real Estate Stylist.
Additionally, there is no substitute for a thorough clean and the repair of any damage caused by pets to walls, floors, and backyards.
“There are so many small jobs that anyone with even the tiniest knowledge of do-it-yourself can tackle,” Chamberlain says.
“Replacing bathroom grouting, updating faucets, and replacing simple fixtures can all have a significant impact on how a space looks.”
“It’s also worthwhile to spend some time in the front garden, as first impressions are critical, and many people will drive by to take a look. You want to ensure that the grass looks nice, the front gate does not squeak, and the letterbox is functional.”
However, avoid major renovations such as kitchen and bathroom replacements, as these will reduce rental yields.
“If you purchase an investment property and then renovate it extensively, you should have never purchased it,” says David Easterbrook, owner of Elite Buyer Agents.
“That is the distinction between what an investor does and what an owner-occupier does.”