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Do Bathroom Renovations Add Value To Rental Properties



Australia’s rental market has become increasingly competitive, with high rents becoming the norm nationwide. This has led to landlords searching for more effective ways to give their properties a competitive edge and attract good tenants. 

Renovations, particularly bathroom renovations, have emerged as a key strategy for enhancing the visual appeal of rental properties, but do they add value? 

Let’s take a look!

A Profitable Venture

Renovating your bathroom can be a highly profitable investment opportunity for property investors. In fact, it is known to be one of the most lucrative renovation projects, with a potential return of $4 for every $1 spent.

Bathrooms play a critical role in any home and are often the focus of attention for both buyers and renters. A well-designed, modern bathroom can significantly increase a property’s overall appeal, making it more attractive in the competitive real estate market. For rental properties, a modern bathroom can justify higher rent rates, while for properties for sale, it can increase the purchase price.

However, the success of a bathroom renovation in adding value depends on the quality of work and choices made during the renovation process.

The Value of Renovating Bathrooms in Rental Properties

Renovating a bathroom can increase the value of a rental property. Here’s how:

  • Attracting High-Quality Tenants: A modern, stylish bathroom can be a major selling point for rental properties. Tenants often pay a premium for homes that offer contemporary comforts and aesthetics. A bathroom with up-to-date fixtures, clean lines, and functional design, can attract a broader pool of prospective tenants, including those seeking a higher standard of living.
  • Commanding Higher Rents: Investing in bathroom renovations allows landlords to position their property at a higher price point in the rental market. A beautifully designed bathroom can justify higher rent, increasing the property’s monthly income and profitability.
  • Reducing Vacancy Periods: First impressions matter, and a well-renovated bathroom can make a lasting one. Prospective tenants touring multiple properties will remember the one with the appealing bathroom. This positive impression can lead to quicker leasing decisions, reducing vacancy periods.
  • Enhancing Property Maintenance and Durability: A renovated bathroom looks better and can improve water efficiency and durability. Upgrading to water-efficient toilets, showerheads, and faucets can reduce water usage and utility bills, an attractive feature for landlords and tenants. Additionally, using high-quality materials and fixtures can decrease the need for frequent repairs and maintenance, ensuring the bathroom remains in top condition for longer.
  • Improving Property Valuation: Beyond attracting tenants and commanding higher rents, a renovated bathroom can also increase the property’s market value. Should landlords choose to sell the property in the future, a modern and aesthetically pleasing bathroom can be a key selling point, potentially leading to a higher sale price.

Renovation Options and Costs

When it comes to updating your bathrooms in Sydney, the scope and the amount you’re willing to spend vary widely. Here’s a breakdown of what you might expect:

The Simple Makeover: If your budget is tight or you’re looking for a quick refresh, a simple makeover might be the way to go. With around $1,500, you can breathe new life into your bathroom. Consider painting over old tiles for a clean, fresh look, updating the vanity to change the room’s focal point, or swapping outdated tapware for something more modern. These small changes can significantly impact the overall feel of the space without a hefty price tag.

The Minor Renovation: With more room in your budget, from $3,000 to $7,000, you can undertake a minor renovation. This could include installing a new vanity that offers more storage or style, replacing the shower screen to make the space feel larger and brighter, swapping out the toilet for a more efficient model, and adding some new tiling to tie everything together. This level of renovation can transform your bathroom into a more functional and attractive space.

The Major Renovation: A major renovation might be in order for those ready to invest in a complete overhaul. With a budget of $8,000 to $25,000+, you can do extensive work like replacing the flooring, retiling walls, installing a new bathtub or a modern shower system, and even reconfiguring the layout to improve flow and functionality. A major renovation can dramatically increase your property’s value and appeal, making it worth the investment for many homeowners.

Budgeting Wisely

Setting a realistic budget is crucial. A useful guideline is to allocate about 1.5 percent of your property’s current value to ensure your investment is proportionate to your home’s worth, preventing overcapitalisation.

While labour costs can consume a significant portion of your budget, there are ways to save without compromising quality.

Tips for Maximising Returns

Strategic spending is key to making the most of a bathroom renovation. Focus on areas that offer the most significant visual and functional impact.

For instance, one of the most effective ways to save money during a bathroom renovation is to keep the existing layout. Relocating plumbing fixtures such as toilets, showers, or sinks can quickly increase costs due to the need for professional plumbing work. By retaining these elements in their original locations, you can allocate your budget towards upgrades that enhance the bathroom’s appearance and functionality without incurring extra expenses.

Updating fixtures, repainting walls, and replacing outdated tiles can thoroughly transform the space without needing a complete overhaul. Adding more lighting or updating existing fixtures can also transform the space. Consider installing LED downlights for a modern look and energy efficiency or add a statement light fixture for a touch of elegance. Proper lighting can make the bathroom feel larger and more welcoming.

Choosing materials with durability and timeless appeal can also ensure the renovated bathroom remains attractive and functional for years. Looking for mid-range fixtures and finishes rather than top-of-the-line ones can also help manage costs while achieving a high-quality look. 

Another strategy for maximising returns is to focus on the small details – the accessories! Consider adding plants, artwork or wall décor, new towels or storage solutions. Even the smallest changes can enhance the overall feel of the bathroom.

Is DIY an Option?

While certain aspects of a bathroom renovation, such as tiling or painting, can be handled by a determined DIYer, the bulk of the work often requires professional expertise. Plumbing and electrical work, in particular, are areas where licensed professionals are required by law in Australia.

Pros of DIY: The main advantage of DIY is the potential savings on labour costs. By doing some of the work yourself, you can allocate more of your budget towards higher-quality materials or additional features.

Cons of DIY: On the downside, if the work is not up to professional standards, you risk diminishing the value of your renovation. Additionally, DIY projects tend to take longer than those completed by professionals.

Final Thoughts

Bathroom renovations can increase the value of rental properties provided they are planned and budgeted carefully. Property investors can significantly improve their rental returns and property values by focusing on affordable upgrades and prioritising improvements that tenants find most important. If you need a bathroom renovation in Sydney, you can count on the team at Crystal Bathrooms to help. 

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