The eastern suburbs rental property market can be competitive for investment property owners, so taking a proactive approach and renovating your bathroom can pay dividends.
A fresh, modern bathroom will attract quality renters and reduce vacancies in between tenants, but it could also command higher rent and increase the value of your property over time.
However, renovating your investment property bathroom is not without its challenges. Investors often don’t realise the complexities involved, are unsure whether permissions are required and fail to budget effectively. Consequently, they end up tying themselves in knots. But it doesn’t have to be this way.
According to the bathroom renovations team at DCON Group, good preparation and planning is essential to keep your project on budget, and avoid delays once the job has started.
1. Check Strata Approval Requirements
If you live in a property under a strata scheme, you might need to seek approval from the strata committee or owners corporation before any works can begin. The type of renovation works you’re considering will determine whether you need approval. Typically, bathroom renovations will require Owners Corporation or strata committee approval due to the re-tiling and waterproofing involved.
Cosmetic renovations, such as interior painting and installing hooks, usually don't require approval since they only affect the inside of the property.
The approval process is not always straightforward, and you may be asked to submit plans of the work and details of the tradespeople who will carry it out. It may also be a good idea to consult with your property manager, since they may have been through the process before with other clients in the complex.
2. Check If You Need Council Approval
As a general rule, bathroom renovations don't usually need council approval unless you make structural changes. So, if you're not moving the walls or changing window or door sizes, you may not need a permit.
However, if you are ripping out an existing bathroom to build a larger room, you may require approval. Whatever your plans it's always best to check with your council to avoid any issues later.
There are three main local government areas in the Eastern Suburbs - Woollahra, Waverley and Randwick. Each council has its own requirements for development consent, so just because a renovation for a house in Maroubra may not require consent, doesn’t mean the same will be true for a property in Bondi.
3. Renovation Budget
The best way to go about planning a bathroom renovation project is to set a budget. It is a big financial commitment, and your goal should be for it to be a profitable investment. The cost of a reno depends on many factors. Among them are:
- The size of the bathroom, its age and condition
- Whether major plumbing or structural changes are needed
- The types of materials and finishes you choose
Before you do anything, consider what you want to achieve with your renovation and how much you're willing to spend to achieve it. Is there enough space for a bathtub? Do you want two sinks? Will the bathroom be purely functional or have slightly higher-end finishes?
To give you an idea of what you may need to spend, here are a couple of sample costs:
According to DCON Group, a basic renovation of a small bathroom in the Eastern Suburbs usually costs between $14,000 and $25,000. This will cover items such as new taps and vanity, a bathtub, toilet, new shower, lighting and re-tiling. The price will depend on the size of your bathroom, the quality of the materials you choose and fixtures included in the project.
If you’re looking to completely gut a bathroom, or move walls, plumbing or convert a room into a bathroom, you’re looking at $25,000+.
4. Plan Your Investment Property Bathroom Renovation
It is important to prepare a proper renovation design and schedule with your contractor. This ensures you don't blow your budget and that you meet your deadline. With an investment property, you can't afford to waste time. You need paying tenants as soon as possible so you can cover mortgage payments, strata fees and council rates without dipping into your pockets. Speak to an experienced bathroom renovation contractor well in advance of your current lease expiring, and liaise with your property manager to ensure a seamless experience.
5. Tax Deductibility
It's worth considering that any renovation works you carry out may be tax-deductible. Renovations are classed as capital works deductions, and the Australian Tax Office allows investors to claim them for residential buildings where construction started after 15 September 1987. You usually can’t claim the total costs in the year you paid for renovations unless they covered wear and tear or other damage due to renting your property. Please speak to your Tax Accountant or Financial Adviser for more information on capital works deductions.
Like To Learn More?
If you'd like to learn more how a high-quality job has the potential to boost your rental income and increase the value of your property over time, contact our team of specialists today.