Should Property Investors Consider a Perth Home Renovation or Extension?
A second storey extension or Perth home renovation are popular projects for homeowners who reside in their property. Many people see a great benefit in the visual and functional aspects of improving their family home, but should property investors go down the same route?
Many investors purchase a house for the sole purpose of leasing it out, or they buy a rundown property to improve its appeal before selling it for a profit.
In this article, we look at both approaches and consider other factors to determine whether an investor should undertake a home renovation in Perth.
Perth home improvement market
According to the Australian Bureau of Statistics, Aussies poured a huge $12.3 billion into home improvements in 2021, up 33% on 2020. That figure has almost doubled when compared to a decade ago.
With the impact of COVID, most people spent more time at home and therefore spent time dreaming of giving their house new life.
In Perth, the property market is tightening, leaving many people struggling to find an affordable house to rent or buy. This unfortunate set of circumstances may be forcing homeowners to undertake a home improvement project rather than selling and buying new.
Benefits of home renovations in Perth
A Perth home renovation is the best avenue for homeowners to take their house to a whole new level. Whether the floorplan or room size is unsuitable for a family’s needs, or the house style is outdated, a home renovation is the solution.
Furthermore, a high-quality Perth home renovation should extend the life of a home, thus increasing the future sale price. For more benefits of the main home improvement methods, take a look at this article.
Is a Perth home renovation worthwhile for an investor?
If you’re an investor and don’t plan on living in your investment property, you may find it hard to see the value in a home improvement project. Afterall, most Perth home renovations or extensions are for the benefit of those who reside in the house. Despite this, a happier tenant will prove very valuable to you as the investor.
If you have a rent-paying tenant, a home renovation or extension is the perfect excuse to increase rent, therefore improving your rental yield. Not to mention, the rental market is tight at the moment, so if a tenant isn’t willing to pay the additional cost, it won’t be hard to find a new tenant. Depending on the needs of your tenant and the cost of the Perth home renovation or extension, you could justify doubling the weekly rent!
The other obvious benefit of a home improvement project is the increase in total property value. However, this benefit is dependent on when the property was first purchased. If the investment property was only purchased a couple of years ago, the added value of a home renovation may not result in a significant profit on your initial purchase price.
On the flip side, if you purchased a rundown investment property over a decade ago, a comprehensive Perth home renovation could provide a very healthy return on investment (ROI).
It’s important to consider the land value of your property, as this contributes to over 60% of total property value. If you own an old home in a valuable suburb – a largescale, modern home renovation should dramatically increase the selling price.
A Nexus second storey addition and renovation in Nedlands – more photos available here
What home improvement options are available
The most popular home improvement options available in Perth are:
Custom designed home renovations
You could renovate just a few rooms, but for a full house transformation, a custom designed home renovation is the answer. Reinvent the whole home for a seamless room-to-room transition and leave guests speechless.
Home extension up or out
If land area isn’t a problem, consider expanding or adding a room to allow for additional residents. If your space is restricted, a second storey addition is the perfect solution.
Modular home extensions
With all the same benefits as a traditional home extension, a modular project allows the majority of work to be completed off-site. This results in minimal interference on the house and prevents tenants needing to move out.
The Perth home renovation expert
Since 2011, Nexus Homes Group has been providing premium house extensions and home renovations in Perth with a superior client experience. Building with Nexus means you will always be in contact with our talented designers and the company Director, to ensure your project is taken care of.
If you’ve got an investment property that needs revival, or you’re planning to improve your own home, contact us today.