Installing skylights to increase the light, enhancing out-door living space, knocking down walls…. these are all major renovations which can potentially add value and increase rental returns.

However, if you’re thinking beyond the usual lick of paint and new carpet to rejuvenate your investment property, there are some key points you need to consider when you’re looking at spending money:

Keep it safe and legal

First and foremost, your property MUST be safe and adhere to the latest leasing legislation. So, your first port of call for any major renovations will be to consider this aspect and to factor this into the budget. As a result, it may involve employing registered tradesmen who can give you the necessary paperwork to show compliancy of the work carried out.

Increase in the rental value

You do need to think about whether the renovation will either make your tenants happier and/or you will benefit from an increased rental return from the major renovation. Does the kitchen really need a full blown makeover or will a touch of paint, changing the flooring, cupboard handles and taps suffice?

Increase in capital value

If the renovation isn’t drastically increasing the rental to give you return on the increase in rent, will the cost of the renovation be covered by any equity in the house? Enhancing the outdoor space with decking or paving is often something you can do yourself, but knocking down walls, installing an ensuite and changing a layout will probably involve quite a few more costs, and again you need to be sure you will get the return on investment.

Planning permission

Adding pergolas and other extensions could require council permission. Applying for this permission again costs money. And you need to be sure you’re likely to get the permission.

When it comes to investment property renovations, remember, you’re not looking at your own personal requirements; this is your business and any renovation you make should be to make you money in some way – make it clean, functional and simple.

Tax-deductions

We also recommend you speak to your financial advisor to see what tax-deductible benefits you can claim, and how it will affect your tax. You may also need to consider what, if any, implications there are in the future when you want to sell the property in the future.

Some of the best feedback we’ve had from clients is thanking us for the advice we’ve given. We’ve given advice on rental adjustments and cost-effective renovations to give added appeal or increased resale value. Plus we make sure all the properties we manage operate within the current legislation, and keep on top of any legislative changes which may affect our clients.

Want to find out more about our property management services? We believe we go above and beyond other agents, which is probably why we’ve been in business for more than 40 years.

Come on in and speak to our dedicated team in the Cardiff office or give us a call on 02 4956 9777.

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