Is it worth renovating a 'tired' property between tenancies?
This is one of those 'how long is a piece of string' questions. It will be case-by-case and there are a few factors to consider. But on the face of it, here's a simple example of one just done by one of our team.
The property was just a bit 'tired', it needed new carpet, an internal paint and a few small repairs around the place. It was Healthy Homes compliant and could comfortably be tenanted again as it was.
The quotes to complete this very minimal cosmetic renovation were just shy of $13,500.
Market rent upon completion was an additional $80 per week.
Or in other words, a gross return of approximately 31%.
For transparency, the property was rented slightly below market to start with so likely only $60pw created from the renovation, but that's one of the factors to weigh up, and still represents 23% gross return on the outlay. Not bad.
There is also the equity uplift in the property which often comes in at around 3x the spend and the reduced future maintenance as well.
So, in this case...It made good sense. In other cases it may not, but it's always worth weighing it up.
Ps. How long is a piece of string? Twice the length from the middle to one end. You're welcome.