When is the best time to renovate your investment property?
The reality of owning on investment property is that there will be maintenance requirements at some stage. The question arises, when is the best time to schedule investment property renovations? What is the best way to carry out works without putting out your tenants and losing out financially? It really comes down to the level of work, ease of access, tenant relationships and income requirements.
There are a couple of scenarios on offer and questions to ask and we look at the pros and cons of each.
Scenario #1 – Renovate whilst Tenanted
Carrying out maintenance whilst tenanted can be a seamless exercise if managed correctly. Ensuring you give adequate notice to your tenants to allow for access and rearrangement of any belongings or household items. Most small maintenance repairs you can arrange without too much inconvenience to tenants. You may require more extensive planning for larger renovations.
Consider:
- How much access will you require?
- What is the scope of works?
- Will the property be liveable throughout the renovations?
- Is there a need to vacate for reasons such as asbestos removal?
- Will there be access to kitchen and bathroom facilities throughout the renovation?
If there are major works to be done whilst tenanted with considerable effects on your tenants, you may need to consider a drop in rent or paying for alternate accommodation whilst works are being carried out.
Scenario #2 – Renovate Between Tenants
The alternate option is to carry out major renovation works between tenancy agreements. This will firstly allow for easy access at times that suit you and your tradespeople. It also means less inconvenience for prospective tenants. Secondly, it is also beneficial when advertising for new tenants as they can benefit from a new and improved property.
The main downfall of renovations between tenants is the rent shortfall. This shortfall therefore needs to be taken into account in your budget allocations.
Investment property renovations really depend on your current situation and current tenancy arrangements. So discuss them with your financial advisor and property manager before carrying out any major works.
