How to boost your rental return by 56%

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When property investors Tanya and Craig took on the challenge of transforming a dark, cramped and floorless 1920s kitchen into a bright, airy and functional space, they jumped in head first – and bumped up their rental income by more than 50%.

Tanya and Craig decided to renovate their 1920s California style bungalow to improve their rental return and increase their equity. It wasn't all smooth sailing in this Ringwood refresh, but the result – an annual $10k rental boost – was worth it .

“When we got to the kitchen, we realised that underneath the kitchen cupboards and bench, there was no floor!” explained Tanya.

“The kitchen was dark and claustrophobic. The walls were a dirty yellow colour, complemented by maroon coloured lower benchtops and black vinyl flooring. The only window was covered with plants and so there was very limited natural light to this dark kitchen.”

Tanya and Craig lifted the space by choosing light, neutral colours. They also opted to leave out the island bench as there was already sufficient storage – this way, the tenants could pop in a dining table instead, giving the illusion of a larger area.

“We knew the appliances and cabinetry would cost us the most, so we started out by visiting a well-known showroom that had all the appliances on display. From there we made a short list of what we wanted and went searching for them at cheaper stores. We had written quotes and asked each retailer to beat the quote until we found exactly what we wanted at the right price.”

Because the house was built in the 1920s, none of the walls or floors were very straight, which added to the overall cost.

“We had to choose custom-made because using the stock-standard flat pack would really not achieve the look we were aiming for. Spending a little extra here means we can confidently ask for more in rent,” Tanya says.

The same was true when it came to hiring expert trades.

“We had to change around some pipes after our plumber told us the current configuration could lead to leaks in the future. The last thing we wanted to do is rip up a brand new kitchen later down the track!”

They opted for oak-coloured floating floorboards, a Caesar-look white speckle benchtop, white cabinets with cupboards and draws, stainless steel appliances and a neutral coloured glass splashback. The finished kitchen is light and airy, and would attract any keen family cook!

THE NUMBERS:
Property value before renovation: $883,000
Final property value after full house renovation: $1,000,000
Rent pre-reno: $320pw - $16,640/year
Rent post-reno: $500pw - $26,000/year

Read the full article featuring
the step-by-step kitchen renovation
in the January 2019 edition of
Your Investment Property magazine
on sale at news agencies and
Coles supermarkets 6th Dec to 10th Jan
or download the magazine now.

 

 

 

Top Suburbs : millner , bendigo , st marys , windale , melton

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Comments
  • A real estate investor says on 19/12/2018 04:22:17 PM

    I feel sorry for this couple. They have a $1 million dollar property and they are getting $500 per week? Really?

  • Dona says on 30/12/2018 02:36:58 PM

    The article doesn't state reno. costs...but an increase in value of $120 000 is pretty bloody good, I'd say.
    $380 to $500, again $10 000 extra a year is nothing to sniff at either. *Don't know where the 56% comes in?
    As for people who own more than two properties, cutting out first time home buyers and reaping extraordinary rents, to me are greedy...why should one person be allowed to own so many properties.
    Outrageous that properties like this example, can increase 14%, because of a little touch up, no wonder the average Joe Blo cannot afford a roof over his/her head in the year 2018.

  • Fendi says on 13/01/2019 02:33:31 PM

    It is also important to look at the areas that are not experiencing oversupply (like for example Southbank and Green Square in Sydney). If the place has huge jump in number of people renting then it is likely there is a big supply of units coming online. Usually rents tend to drop in such scenario. Established suburb with no unit oversupply tend to perform the best. Just saying location is important.

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