Growing up around the family business, I developed a passion for property, learning all about the potential in undeveloped properties.
Now, 10 years later, I find myself combining my work and my passion to offer a service I love. Rental renovations – as they are called – allow my clients the chance to re-evaluate their investments, and further improve and increase their return by up to 50 per cent in some cases.
Rental renovations came about as I was becoming increasingly aware of landlords who would neglect their investments, thinking a renovation would be too much for them to manage, and not realising that with a small cosmetic makeover costing no more than $15,000 to $25,000, they could achieve double the rental return.
My first rental renovation was a valued client who owned a block of four flats, which we had managed for over 20 years. This client relied on the property as their only source of income.
One of the flats became vacant and in the market we were in, nobody in their right mind would consider living there, let alone pay the market rate. After arranging a meeting with the owner, they decided to move forward with a cosmetic renovation.
We went ahead with painting, polishing timber floors, a new kitchen, a new bathroom and light fittings, which would be coordinated not by a builder who often adds their 30 per cent on top, but by myself and a selected team of tradesmen.
The property was renovated in four weeks. Since rental renovations, we increased the income from $140 per week to $320 per week. The current tenants have lived there for five years.
We have now carried out renovations on all four flats and the common areas in the building, increasing the total income from approx $800 per week to $1,600 per week
Not only does renovating a property increase your client’s return, it can also be beneficial for the property manager, offering lower vacancy periods, fewer repairs, better quality tenants and a higher business profile.
The renovation will mean that the property can be advertised at an increased rate, which means that with the right marketing, the property company can attract new business of the same calibre.
To coordinate a renovation there are five steps you need to follow:
STEP 1: RENOVATION INVITATION – Select a team of licensed and competitive tradespeople you trust. Arrange a 30-minute window for tradesmen to attend and quote the work that is required.
STEP 2: LIST OF WORKS – Have an agreed list of works that the client is prepared to undertake.
STEP 3: APPROVAL – Forward all written quotes to the client and obtain written approval to move forward. In some cases you may need a deposit from the client as some tradespeople will not commence without this. It is also a good idea to have a contract drawn up and signed by the client.
STEP 4: COORDINATION OF WORKS – Have a time frame drawn up in which you want the job to be carried out and advise the tradespeople of tentative dates in order to have one tradesman finish and the next start. You may be required to visit the site to monitor works and plan your next step.
STEP 5: FINAL INSPECTION – The property will probably need one final professional clean after all work has been carried out. Then have your client inspect the finished product if possible in order to sign off on the job and make final payment.
Like all services provided by property managers, everything is best communicated in writing, from feedback and updates to colours and finishes chosen. Don’t forget strata buildings require notification and in some case permission.
If you seek legal advice, this should be covered in your contract with your client as this service is probably not included in your Managing Agency Agreement. Tailor fees case by case and don’t forget, goodwill is priceless and you never know, may transfer to a future sale.
SANTOS SULFARO is an award-winning sales and leasing manager at Richardson & Wrench Leichhardt. For rental renovations see www.tv.rwleichhardt.com.au
