Should You Renovate Your Investment Property?

Perway Construction Services
December 04, 2023
A savvy investor is always looking for ways to increase the value of their portfolio and maximise their income. One strategy commonly employed by property investors is a home renovation to increase rental returns or improve the capital value of the property. Even though this is usually a smart move, you need to explore the risks as well as the benefits before embarking on a potentially costly project.

The Benefits of Renovating an Investment Property

  • Increases the value of your investment portfolio 
  • Increases demand for the property
  • Enables you to charge higher rent, thus creating higher rental returns
  • Added appeal to prospective buyers
  • Can modernise an older property
  • Can incorporate sustainable building practices
  • Can integrate smart home technology 

Things to Consider Before Renovating an Investment Property

Property renovation can be costly and labour-intensive. Even minor projects such as replacing a carpet or painting a wall take time to complete – and if you’re carrying out renovations between tenants, your property won’t be generating any income while the renovations are taking place. When it comes to an investment property, it’s even more important that you stick to a budget so that you don’t end up spending more than you initially anticipated – as this could easily negate any capital growth or rental return gains. It’s important to factor in regular maintenance costs and repairs, too. Also take into account the risk that property values could suffer a downturn. If you fail to follow market trends, the renovated property you bought may end up being worth less than what you invested.

Property Assessment Prior to Renovation

Before starting, you need to determine whether a home renovation will be a profitable endeavour, especially if it’s more than a simple cosmetic renovation. This first means assessing the current state of the property. 
  • What is the age of the building? 
  • Are there any visible signs of wear and tear? 
  • Does it abide by the relevant building codes? 
Gather as much information as possible to get a proper understanding of what will be required to do upgrades. The renovation experts at Perway Construction can help assess your property and make recommendations on the extent of renovation that would be beneficial.  Speak to local estate agents to get an overview of the current rental market in the area and how much you can expect to secure in terms of rental income. Similarly, research current sale prices of similar properties nearby to get an idea of the resale value of your place.

Financing a Property Renovation

Where will you acquire the funding to make the necessary changes? Many lenders offer home renovation loans, which can be tailored to the exact amount you require. Alternatively, you can opt for DIY renovations which can save you money. However, this is only recommended if you have the necessary technical skills, expert knowledge and experience to perform complex renovation tasks. Otherwise, it is best to use a reliable home renovation contractor like Perway Construction Services. We source and use only the best quality materials, ensuring premium renovation work. We are experts at ensuring renovations are cost-effective and delivered to schedule,  protecting your investment and ensuring that any renovation is a net boost to your investment portfolio. With the right approach, you can potentially create a beautiful, desirable property that will fetch you a healthy return. Start your home renovation today.