What improvements should we make to our IP before renting it out again?

Hi all,

We have an IP in Ultimo which we have owned since new (2001) which has been a good earner for us.

With the exception of a new HWS we have not spent any money on it and to date it has been tenanted for whole period with no vacancy. Our tenant has given us notice that he wants to vacate soon and this is the first time that we have had the opportunity to add some rental value to it.

Although we can rent it out immediately, we’ve actually been waiting for this day so that we can give it a small makeover.

Now the question is what do we do to the place? It’s currently renting under market and with a little improvement I can get an extra $60pw.

Pros for apartment:
· High demand area.
· Small development.
· 100m2, 2 level penthouse apartment.
· 2 bedroom with single carspace, balcony and private courtyard.
· 1.5 baths + ensuite off main bedroom.
· By-Law approval for split airconditioning.

Negative for apartment:
· Common areas poorly maintained, which means it’s easy to overcapitalise on improvements for resale as potential purchasers may be put off by first impression of the building’s internal common areas.

Currently, apartment has floorboards in kitchen and carpet in living and dining areas on the ground floor and carpet on level 1 for the 2 bedrooms and hallway. Stairs are timber treads. Kitchen is dated with timber cupboards and black granite benchtop.

FYI, previous tenant use to complain about the carpet being worn and blinds being frail from sun damage so I think this would be a good place to start.

Question is what do you guys think I should do to spruce it before renting it out again? Do I just polish and seal the timber in the kitchen and re-lay new carpet as per original or do I put floorboards across the entire ground floor and new carpet on level 1? New blinds and white paint throughout for sure I imagine? Maybe do the aircon? I could replace the kitchen appliances while I’m at it but is it worth doing it if appliances still work (albeit 17 years old) and cupboards will still be old? Thoughts?

Also, if you can recommend any cheap carpet/floorboard/blind retailers in Sydney I’d love to hear of them? What sort of carpet/colour do you recommend?

Plan is to have the place vacant for 3-4 week and then re-let it. I know 3-4 weeks sounds like a long time, but as I said it’s been a good performer for 17 years and I actually see the tenant giving notice to vacate as being an opportunity, rather than a negative.

 

The air con would probably be a good idea, attractive to tenants.

Often the best bang for your buck is to repaint throughout in a light colour. If not painted since 2001 it is probably due and can make an amazing difference.

Blinds probably worth replacing if sun damaged.

Only replace carpet or appliances if necessary.
Marg

 

Air con and dishwasher are 2 things that can draw tenants. Painting gives max bang for buck. But if you're able to rent it out as is, why spend money? Have you calculated how many years it would take to recoup the money spent on renovating?
I would renovate in 4 circumstances
1) Property is in desperate need for renovation in order to attract tenants/decent tenants
2) Need to extract equity and the desktop vals for comparables are very low.
3) Need to sell the property
4) Looking to flip the property