BRRRR
4 min read
If you want to increase the value (and rent) of your investment property – there 6 top renovations you can do.
These are the tried and true methods renovation-focused investors use. That’s especially true when they’re using the BRRRR strategy.
(By the way, BRRRR stands for Buy, Renovate, Rent, Refinance, Repeat).
And even though I don’t renovate properties anymore myself, these are the tactics that have always worked for me in the past.
In this article, you'll learn six ways to renovate your property to maximise your property's cash flow. In our experience, these have the biggest impact on the property's rent and value.
Adding an extra bedroom is the quickest and most cost-effective way to increase the value and rent of a property.
However, it’s only cost-effective if the bedroom is added within the current internal floor plan of the property. And, only some houses can be re-shuffled in this way.
For starters, you need to buy a property that has enough space to add the bedroom (without building an extension).
Most houses built in the 60s-80s have extra space. For instance, there might be a dining room or second lounge you can convert into a bedroom.
Sometimes, you can turn your property from one dwelling into two. Or, you might be able to change it so you can rent the property out to more people.
You might be able to add another dwelling on the same property. For example, you might add a minor dwelling in the backyard.
Or, there might be a bedroom in the garage, that you can convert into its own dwelling. That way you can rent it out to another household and earn more rent.
However, property investors tend to focus on a "top-down conversion".
This is where an investor purchases a two-story property and separates the upstairs and downstairs.
Ultimately, two households can rent the now-split house separately.
For these sorts of conversions, you need a large floor plan.
As an alternative, consider a room-by-room rental conversion.
This is where you convert a property so that each room can be rented.
It's only an option for some, but this approach often delivers higher rental returns.
Kitchens and bathrooms are the stars of any property listing. Potential tenants often judge a property's quality based on these spaces.
People often see a run-down bathroom as a dirty one. Same for a grotty-looking kitchen. These will keep your property value low.
Bathrooms and kitchens must be clean, modern, and functional.
But don't overspend. Remember, this is an investment property, not your dream home.
Stick to practical designs and cost-effective materials to avoid blowing your budget.
Doorknobs and light switches may not sound like the blockbusters of property renovation ... but don't overlook them.
Collectively, these small items can redefine a property's whole perception (and price).
For instance, a brand new set of door handles can bring a dated property out of the 1970s and make it feel like a New Build.
A yellowing light switch can make a property feel dated … and also unsafe.
Most of the time, replacing these items is cheap but can quickly add value and rental potential.
A fresh coat of paint is one of the simplest ways to revitalise a property. But it often involves more effort than expected.
There is much more to it than picking up a paintbrush.
It may be necessary to strip old wallpaper, fix fresh gib and skim the bumps on the walls.
This sort of work is highly labour intensive. It can add a week to the original quote – if you were hiring a professional.
If you want to DIY it, you must do all that prep work yourself.
Flooring has a massive impact on a property's appearance. But upgrading doesn't always mean replacing.
Sometimes, a commercial carpet cleaning can add massive value for an exceptionally low cost.
Similarly, you might decide to sand and polish your hardwood floors.
But if your carpet is frayed, burnt and has a couch footprint – then replacing the carpet is your only option.
A fresh, professional install will cost you about $4,500 for a 3-bed, 1-bath house.
Renovating your property is about more than just making it look good.
It's a proven strategy to boost rental income and build equity faster.
These six steps contribute to turning your property into a better-performing asset.
Not only will you get more rent, but it will also pave the way for your next property purchase.
Remember, every smart renovation is an investment in your financial future.
Managing Director, 20+ Years' Experience Investing In Property, Author & Host
Andrew Nicol, Managing Director at Opes Partners, is a seasoned financial adviser and property investment expert with 20+ years of experience. With 40 investment properties, he hosts the Property Academy Podcast, co-authored 'Wealth Plan' with Ed Mcknight, and has helped 1,894 Kiwis achieve financial security through property investment.
