If you own a rental property, there will come a time when you need to consider renovating. Renovations or home improvements can be a great choice for rental properties, whether to combat a problem or secure a better return on your investment. However, they almost always involve a significant expense, and it’s not always easy to know whether the project will be worth the cost. To help you make an informed decision, this guide will explore the key benefits of renovating your rental property and the kinds of situations where it might make sense for you.
Reach The Minimum Standards For Rental Property
It’s important to note that as a landlord in Ireland, you have a legal duty to ensure that any property you rent out meets certain minimum standards. These standards include things like:
- The property must be free from damp and in good structural repair
- Hot and cold water must be available
- All rooms should have adequate ventilation and heating that the tenant can control
- Electrical wiring, gas and water pipes must be in good repair
For the full list of requirements, you can take a look at the RTB website. If your property isn’t currently up to scratch, then it’s vital that you carry out the necessary improvements as soon as possible. If you continue to rent it out in its current condition, then you risk penalties and even prosecution from the housing authority.
Reduce Your Repair And Maintenance Costs
A good reason to start renovations is to lower the cost of upkeep. Not only is it expensive to regularly send out plumbers, electricians and other tradesmen, but it also causes disruption for both you and your tenant. Renovating rooms where problems are more likely to arise, such as the kitchen or bathroom, is usually money well spent. The initial cost may be fairly significant, but it can help to lower your repair and maintenance costs many years down the line.
If you only have to deal with repairs once in a blue moon, then you may not want to commit to the cost of a renovation just yet. However, if you find that you are getting calls from your tenant on a more and more frequent basis, then it may be time to make some improvements. There are plenty of resources out there that can show you which parts of the renovation are worth spending more on and where you can cut back. This will help ensure you that the expense will be worth it in the long run.
Increase Your Property Value And Rent
When you don’t live in your property, adding value can be a determining factor when deciding to undertake renovations. However, certain renovations have a much more significant impact on property value than others. For instance, an upgraded kitchen has potential added value of up to 20%, whereas less important areas like hallways won’t have the same financial effect. Make sure to do your research to determine what kinds of renovations will be the most cost-effective in helping you reach your goals.
When the right improvements are made, you may be justified in asking for a higher rental price for the property. However, note that if your property is in a Rent Pressure Zone (RPZ) you will only be able to increase the rent by a maximum of 4% per year. If this is the case, then renovating with the sole aim to increase your rent will not be worth the expense. For more information about this, head over to our blog post Everything You Need to Know About Rent Pressure Zones.
Keep Your Tenants Happy
Upgrading some of the more outdated areas of your property can go a long way in keeping your tenants happy, which can make for an easier life as a landlord. Making improvements shows that you care about the standard of the property, and a more modern, attractive home can also help attract better quality tenants who will make the effort to look after it.
Renovations can also have a more practical effect on the day to day happiness of your tenants. For instance, old floors and windows can have a huge impact on the amount of noise that can be heard inside the property. Updating to a more modern solution can not only help keep the noise down but also improve the home’s insulation, making a big difference to your tenants and lessening potential complaints.
However, it’s important to consider your target rental market. If your property is near a college or university and you market it to students, then having the most modern, high-quality interior will not be so important. For student tenants, the primary concerns tend to be location and cost, so in this case renovating may not make much of a difference in how they view the property.
Stay Competitive In The Rental Market
A common reason for property owners to renovate is to help their property stand out in the crowd, or at least match the area’s property standards. In many markets, where there is plenty of choice in rental properties, this makes perfect sense. While there are some renters who look solely for the lowest possible price, the majority are looking for a good quality property that suits their needs and is offered at a fair price. If there are many homes to choose from, those of a lower standard can prove much harder to rent out.
However, across Ireland, particularly in major cities like Dublin, there is a high demand for rental properties and they are rented out extremely quickly. This means that you don’t necessarily need to have a newly renovated home to attract tenants. That’s not to say you shouldn’t make improvements if the property needs it, but that this particular benefit may not apply to you. If you are considering renovating for any of the other reasons on this list, then it may still prove to be a sound investment. If you want to learn more about your obligations as a landlord in Ireland, read our post on the top things you must do as a landlord.
There are many different reasons to consider renovating your rental property. As long as you do your homework, understand the implications and budget properly, making improvements can have a positive impact on both your tenants and your success as a landlord. But as with any big decision, having someone to offer professional insight can be truly invaluable.
Property management companies can provide solid advice for your rental property based on years of experience and know-how. They stay up-to-date with market trends, be knowledgeable about property values and will often have a network of tradesmen that they can recommend. Having a helping hand can not only give you extra peace of mind that you are making the right choice, but can help make the process easier and more streamlined.
At SCK Group, we manage properties for landlords in Ireland. Along with advice and guidance, we offer a range of packages from a basic lettings service to a complete end-to-end service that will take care of all the hard work for you. If you’re interested in finding out more, head over to our contact page to arrange a complimentary consultation.