5 Renovation Mistakes Landlords Should Avoid
Renovation mistakes can be costly especially if it is done on a big scale. That’s why planning a house renovation needs to be done right in order to avoid irreparable damage.
Especially if you’re a landlord, where renovation mistakes can easily impact your rental price and affect your return on investment in the long run.
As a landlord, your main focus should be doing improvements to increase rental value, if your renovation is not contributing to that, then you might want to reconsider your planning.
Remember that not all renovations are suitable for your rental unit. Some renovations require consistent maintenance that may impose more spending than returns. Some might require delicate care that your tenants can not afford to give.
To save you the trouble of dealing with expensive repairs and high maintenance, here we have listed down the top 5 renovation mistakes that you should avoid as a landlord.
- Overspending on House Renovation Cost
- Not Considering House Floor Plan Design
- Skipping Home Inspection Before Renovations
- Not Doing Renovations That Increase Home value
- Not Having a House Renovation Planner
Overspending on House Renovation Cost
Overspending on house renovation cost is one of the top renovation mistakes that landlords commit. They spend too much on renovation cost thinking that it will double their profits when in reality it does not.
Remember that most tenants look for functionality in a rental unit and excessive renovation may cause you more loss than profits as they require high maintenance and extra care.
House renovation cost may differ according to your renovation project and the type of house but ultimately it is not something that you should take lightly.
Renovation costs may vary according to how you want to approach your budget. Mainly renovation cost in Malaysia can be approached based on the space you want to renovate, refer to the table below to understand what are the renovation cost in Malaysia.
|Kitchen||RM20,000 to RM50,000|
|Living Room||RM10,000 to RM30,000|
|Bathroom||RM10,000 to RM30,000|
|Bedroom||RM15,000 to RM30,000|
Your renovation cost may even go up to 10% of your house value, but if you’re looking to renovate your house for the sake of renting out, we suggest you stick to a lower budget.
Basic improvements and renovations should be sufficient for your rental house. Don’t be seduced by fancy fittings and fixtures that will not help you maximise your return on investment.
Every component of your renovation project will cost you money, from furniture cost to contractor charges. In order to ensure your money is being invested optimally, draw up your home renovation budget before you start your project.
Not Considering House Floor Plan Design
Another one of the common renovation mistakes that landlords often make is renovating without referring to the house floor plan design.
Be it for better ventilation, sunlight or traffic flow, your house floor plan design lays out the important components that you should take into account when renovating your house.
It gives you an overview of the connection between spaces and the dimensions give you details on the measurements that you can use to create a mock-up of your ideal design.
At the end of the day, you don’t want to make renovation mistakes that disrupt the flow of your house. So here are some tips for a good floor plan design:
- Allow natural lighting to flow in
- Make room for sufficient storage
- Work with your existing structure
- Remove things that will obstruct traffic flow
- Consider air ventilation in each room
These tips will help you decide on the optimal furniture placement and if you’re making structural changes this will help you make better space utilisation without disrupting wirings and plumbing.
Skipping Home Inspection Before Renovations
Should you get a home inspection before renovations? Yes, you definitely should! Your renovation might damage your house more than you think.
Before taking the home down and start renovating it, try your best to have a house inspection done to detect cracks, leaks, rusts and overuse of the electrical system.
In the end, you don’t want to be adding those extra electrical outlets when your electrical system cannot handle them. Nor do you want to install those fancy fixtures when they do not go well with your plumbing system and will only clog your drainage.
So hire a professional home inspection service to help you look into the weaknesses of the house and prevent expensive damages in the future.
Not Doing Renovations That Increase Home value
While you dream of doing renovations that increase home value and maximise profits, some renovations are pointless especially for your rental property.
They don’t add more value to your prospective tenants or do they help increase your house selling price. So what are some of the renovations that do not increase home value? Here we listed down 5 of them:
Not everyone shares your taste, especially wallpaper as they quickly go outdated. That’s why a lot of real estate agent would advise you to scrape off your wallpaper to create a more neutral interior.
2. Bright Floor Tiles
Blowing your money on bright floor tiles when you’re renting out your property is not a smart move. Bright floor tiles may appeal to you but not to your prospective tenants or buyers. In most cases, they don’t care and don’t think it adds value to the house.
3. Swimming Pool
Most often investing in a swimming pool does not get you the intended return of investment. The cost of installation and maintenance are high while the resale value will not be tantamount to the investment.
Carpets may reflect your personal taste and might not appeal to a lot of people. Especially in hot and humid weather where it becomes the perfect breeding ground for mould thus why most people would question their hygiene and shy away from houses with carpets in Malaysia.
5. Chandelier Light
Not only is chandelier light expensive but they may also be trend sensitive and may not appeal to everyone. Not to mention chandeliers also require high-effort and costly maintenance. This might not be ideal for your tenants who are renting on a short-term lease.
Apart from these renovations, you also need to avoid making renovations that will go over the average price of the house in the neighbourhood. The price of the house will usually reflect the demand of local home buyers and the amount they’re willing to pay.
With that in mind, you don’t want to be making these renovation mistakes just because you think it will increase your house value exorbitantly. In the end, no one will be willing to pay 2 times the amount just for a few more fittings and fixtures that do not bring practical value to them.
Not Having House Renovation Planner
Most often landlords also make the renovation mistake of not hiring a house renovation planner. Be it hiring a professional house renovation planner or taking up the task yourself, you will need to assign someone to oversee and manage the renovation.
Having a house renovation planner is critical in ensuring that the renovation project delivers its intended outcome, meets your budget, timeline and requirements.
Aside from that, having a house renovation planner is also important so that any structural changes, wiring or plumbing works that took place will be noted down for future reference. This goes a long way in preventing complicated and costly repairs in the future.
There you have it, 5 renovation mistakes you should avoid as a landlord. Now that you have a better understanding of what renovations to avoid you can focus on doing renovations that add value to your rental property.