Savvy investors are always looking for ways to keep their properties ahead of the rest of the crowd and with interest rates at all time lows, now really is the best time to renovate your property.

In most capital cities renal yields are sitting at 4.5% and with interest rates at record lows many investment properties would be cashflow positive investments. This mean your property is making you money from the rent you are receiving.

If this is the situation you have found yourself in, it may be a good time to consider renovating your property. Spending money on Kitchen and bathrooms not only will attract a quality tenant, it may also help reduce the tax impact. It will also improve the value of your asset, which after all is one of the main reasons for owning an investment property in the first place.

A successful renovating can attract quality tenants, increases the value of your asset and helps reduce the tax impact all at the same time. However, it will require you to research the right company for the job. You need an expert that understand your end goal, which is a quick turn around and within budget that is modern enough, to last the test of time.
Renovating the Kitchen and bathroom is where you are going to gain the best results, especially if these areas haven’t been touched since the 80’s.
So what are the benefits of renovating your investment property?

1. Attract and retain quality tenants
These days tenants are looking for a place to call their home. It now not only about location and convenience it is about the look and feel of the property. This is especially true as housing become less affordable and tenant become long term renters.

One way of attracting and retaining a quality tenant is renovating the kitchen and bathroom, with modern and neutral colours. Not only will this help ensure the property will suit most tenants taste it will also ensure the property doesn’t date. We all remember the pink bathrooms with matching pink toilets – this certainly was a trend that didn’t last long.

Even a coat of paint, with new flooring and curtains will help attract a better tenant.

The benefits of renovating between tenants will help to ensure they are happy, more comfortable and may even help with them to look after your property, as they are made to feel like this is their own home.

2. Increase sale price
If you are looking to sell your investment property, renovating will certainly help improve the sale price. Many buyers don’t have a good imagination, so when they are viewing properties to buy, they will pay more for a property that they can see and feel themselves living in.
These days a lot of buyers are borrowing at their maximum and therefore looking for a place that already has been painted, with a new kitchen or bathroom, will attract a premium.
Keeping your investment property up-to-date will also help if you ever need to sell quickly. Therefore if you are in-between tenants, it may be a good idea to freshen up your place.

If you have the means, renovating the kitchen and bathroom will add significant value.

It is essential that you choose colours, fixtures and furnishings that won’t go out of fashion. The safest bet is to stick to neutral colours or use a consultant to guide you. By using classic colours and styles, your property will appeal to a larger range of buyers, thus increasing the selling price.

3. Quick turnaround between tenants
Each week you are without a tenant you are losing money. One way to keep your property vacancy rate to a minimum it to keep your property up to date. While this will mean you will have a couple of weeks without a tenant, in the long run it will mean these period of time will become shorter or in same cases not at all.
The best way to manage a renovation between tenants is to plan. Generally speaking, a tenant has to give 1 month to 6 week’s notice. Once you receive this information from your property manager, you need to start planning.

Contact an investment property renovation specialist and start the process of measuring and quoting, so that when your tenant moves out the team of experts can start straight away.
When looking for the right team of experts to do the job, you need to make sure they understand how important time management is as well as your budget. A quality investment property renovation specialist will act fast, they will get in and get out. They will line their trades up so there are minimal delays. As mentioned above each week your property is without a tenant you are losing money. Budget is the second important factor when choosing your renovating specialist, remember you do not live there. You need a quality, modern and within budget renovation that will attract the best tenant willing to pay the current rent.

4. Increase depreciation from a tax perspective
Renovating your investment property, may increase the amount you can depreciate. Depreciation is an accounting method of creating a cost of a physical asset over the life expectancy. meaning your asset is going down in value over time due to wear and tear over the course of it useful life.
This percentage loss for the year is added to your tax return and reduces the tax you pay on the income you are making from your property. While you are not physically losing money this tax break will help reduce your tax, especially considering your property maybe positively geared due to the low interest rate environment.

5. Increase rental yield
There is no point putting a stone bench-top in a property where the weekly maximum rent for the area and size of the house is $300 per week. The cost of the bench top will not increase the rent enough to pay for itself. Generally the rule of thumb when renovating is no more than 10% of the total value of the property, this will help ensure you don’t over capitalise and maximum your rental yield.

However putting in a new kitchen or bathroom may help to increase your weekly rent, especially if your current kitchen and bathroom were last update in the 70’s. investing in repainting the walls and replacing the curtains will also add value to the property and help qualify the increase rent you require.

6. Improve energy efficiency and reduce environmental impact
installing solar panels might seem like a drastic and expensive outlay, but quite rapidly your current and future tenants can reap the rewards. This will make the property more appealing to tenants because the rapid rise in electricity prices is causing real financial stress for renters.

In areas with consistent bright sunlight, installing solar is a great option to consider as this can add value to your investment property. Many people, in particular millennials, are becoming increasingly environmentally conscious and are renting for longer. Your tenants can also use an app to see how much power is being produced, and how much they are using, which helps them use power efficiently to reduce costs and environmental impact.

If installing solar panels is not an option, there are other renovations that can reduce environmental impact. This can be as simple as double-glazing windows and providing quality blinds and curtains to retain warmth in winter and keep the home cooler in summer. If you have reverse cycle air conditioning, upgrade