To find a new tenant or to increase the amount charged in rent, it is sometimes necessary to upgrade the property.
This can be challenging as most renovations will require the home to be vacant unless the property is leased by a very accommodating tenant.
Luckily, there are a few affordable and simple ways to upgrade the space to make it more appealing to tenants.
Adrian Goslett, regional director and CEO of RE/MAX of Southern Africa, explained that increasing the appeal of a rental property follows the same principles of increasing the appeal of a home that is up for sale.
“In both scenarios, the purpose of the renovation is to make the property appeal to the largest possible number of potential buyers or tenants. The greater the number of interested buyers or tenants, the more they will be willing to pay and the possibility of a bidding war increases which could push up the asking or rental price further,” he said.
The rental market is already swinging in the favour of landlords. PayProp head of data analytics, Johette Smuts, explained in the 2021 PayProp Rental Index Annual Market that in December, the average rent increased by 1.5% year on year (YoY) – the fastest rise since July 2020.
Landlords who would like to capitalise on this growth could seize the opportunity to upgrade their space while prices remain strong.
“Renovating an investment property can take time, money, and may even require that it stays off the rental market for some time. To maximise returns, it is best to look for affordable and easy home improvements.
“For example, landlords could start by giving the property a fresh coat of paint – it is amazing how much this can change a space. Being strategic with accent walls and colours can even create the illusion of more space,” said Goslett.
Another affordable option is to replace old doorknobs and cupboard handles in kitchens, bathrooms, and bedrooms.
“These simple switches can make the whole room look more modern, which could create greater appeal to tenants,” he advised.
A slightly more expensive upgrade would be to replace the flooring, especially if there is any carpeting that is stained or dated.
“In rental properties, it is better to have a hard-wearing floor that is durable and easy to clean. If there are carpets, then the landlord will need to make sure that these are professionally cleaned regularly. For this reason, it is often better to install laminate or vinyl flooring, as these tend to be the most hard-wearing flooring options,” Goslett suggested.
Goslett also recommended that landlords install features that enhance the sustainability of the home.
“Solar-powered geysers and water-saving faucets are great examples of how landlords could achieve this. Not only will it cut down on water and electricity costs for either the landlord or the tenant (depending on how the lease agreement is structured), but it could also increase the appeal of the home as green features are becoming increasingly sought-after,” he said.
Whether landlords decide to upgrade their space or not, they may still see rental demand increase in the year ahead.
Goslett predicts that the rental market might experience some growth this year as a result of the rising interest rates.
“With every interest rate hike, purchasing a home becomes a little more expensive. This may shift demand back to the rental market, which would have a positive effect on rental prices,” he said.
