Hi there, my name’s Ben Everingham. In today’s video we’re going to talk about what upgrades should you consider when building a brand new investment property.
G’day there. My name’s Ben Everingham. I’m the director here at Pumped on Property. We’re a buyer’s agency who help people build and buy high quality investment properties in the Queensland and New South Wales markets. In today’s video I’m going to talk about what upgrades should you consider when building an investment property because I think there’s a lot of things that people do that they make significant mistakes with when building brand new.
A lot of these things have to do with the upgrades they choose to include or don’t include. I think people spend money on things that tenants don’t really care about and they forget to spend money on things that tenants really do care about. The reason I’m having this conversation is just where I’m coming from I suppose, so there’s some credibility and you’re not like, who’s this guy telling me about what upgrades to consider and why does he know this? Before I started this business I worked with a building company who built over three and a half thousand homes a year globally.
I’ve built a huge amount of property for myself with my wife who’s an interior designer. My wife’s dad is also a builder that builds over 200 properties per year. We run a buyers agency that helps our clients buy around about 40 million dollars worth of property per year and probably build anywhere between ten and fifteen or twenty properties a year. I also run a property management business. After we build the product we rent it out. The reason I’m sharing that is because from all of those different experiences I’ve learned a huge amount about this space.
I think it’s really important to share some of those things that I have learned with you, so that you can make the best possible decisions when you’re sitting down with your builder and spend money on the things that matter, and save money on the things that don’t, and get a better outcome. Which means, better capital growth, better valuations, and better rental returns. I’m going to talk about a few different things. I’m going to talk about the internal part of the property. The external part of the property. Some of my personal experiences.
Then, we might talk a little bit about how to select the right builder and how to select the right designer, and holding the builder accountable to this stuff, but let’s talk about the internal things, which again, we’re talking about what upgrades you should consider when looking at the internal part of a property, so the inside of a property. The things that my wife and I like to do, starting from the front door and working towards the back door, we like to do a nicer tile than your standard. A builder’s standard tile is generally pretty cheap. It’s one of the ways that they save and make money, and make the build cheaper.
They generally do like a 400×400 millimetre tile with a wavy edge. I personally think a great upgrade, if you’re considering going above just the standard build of product would be to look at a 600 millimetre by 600 millimetre rectified edge tile. It just gives it more of that design superior finish and feel. It is a little bit more expensive to buy the tile. It’s a lot more expensive to lay the tile. About an extra $30 a metre squared, but the value that it adds when you walk through the front door. It just does add value to the property. It does make it feel grander, more designer, more sophisticated, and ultimately more expensive.
Rectified edge tiles are the first thing when you step through that front door that you notice. Another thing that I like to do with my wife is standard for everything that we build. We actually just finished building a beautiful home on the water in the Sunshine Coast in Queensland. These are the things that we did in that home for ourselves. A higher ceiling. Your standard ceiling height’s cool. I get it. If you don’t want to spend money to make some money, then don’t consider this. We, as an absolute minimum, we go 2500 ceilings, which is about an extra 15 centimetres higher than the normal ceiling height.
In our new home we’ve gone far higher than that. It gives that feeling or that illusion that it’s a more expensive build because it feels more spacious, more open, and gives that illusion that it’s got that designer element to it. Another thing that we do is, with the standard skirting boards in the property … Again, these are just really simple, really cheap things that you can do that add that sort of wow factor to a property when you move through. The things that most people forget when they’re specifying everything with their builder, because they are overwhelmed, but if you can think about these things, write a list of these things, and actually create these things before you walk into the builder, or when you’re talking to your builder it can just make the process a lot easier.
The skirting boards are standard in most homes. They look pretty cheap. They look pretty nasty. We just do like a 900, sorry a 90 millimetre skirting board, which has just got a flat edge at the top and it’s just a like big rectangle. It just, again, looks a little bit nicer than the average. It costs us about $300 more for an entire house, you know what I mean? This is like a 350 square metre home. It’s not a big expense, but it does look great. That gets me to another point, which is, your ceilings. Again, there’s standard corners, which is basically that little thing that you generally see between the ceiling and the walls kind of hiding the joint in the wall at the angle.
What we do for our properties now is, it’s a little bit more expensive again. About 1500 bucks to two grand for a whole house, but we get them to do a square set ceiling. Which basically means there’s no joinery there. It’s just one piece of sheet directly up against another sheet. It gives it that really crisp, really designer architectural style feel for a really cheap price. That’s a really simple thing that you can do. Increase the ceiling height. You know, improve the quality of the finishes in the home and that’s a really nice way to start.
As we come down the hallway I always do a slightly nicer carpet than builder’s standard. Let’s say we’re turning into one of the bedrooms now. A slightly higher carpet. Most of the carpets that builders use, investment grade builders anyway, use a pretty cheap and nasty carpet. They definitely make an impact. If you walk on something that’s a bit softer we generally put little bit of a thicker underlay in there as well, so it feels a bit softer, a bit like what we all grew up in back in the old days. As opposed to this tough mat style carpets that we put down on slabs these days.
In the bathrooms we like to do a slightly nicer tap finish. Slightly nicer things like toilet roll holders. Slightly nicer door handles than the builder’s standard. We like to specify or choose those things ourselves. Again, insignificant amount of money over an entire house, but just a really nice touch to make it feel better and more expensive. In the bathrooms your general builder’s standard for a shower would be like a frame, a shower that’s got framing in it. We like to choose a semi frameless shower screen. That just means that instead of having the pieces of metal all over the shower and it kind of looks a little bit cheap, you go for a semi frameless feel, which means the glass closes onto glass and it kind of just feels a little bit better, a little bit nicer.
The other thing that we do in the bathrooms, is we go wall to floor ceiling. Sorry, wall to floor ceiling. What am I even saying? Wall to ceiling tiles. Again, it makes it feel grander. It makes it feel more expensive. Just keep the colour pallet simple. We normally do like 300×600 white gloss tiles, or white matte tiles. They look really nice. It’s not significantly more expensive, maybe an extra 1500 bucks to three grand depending on the size of your bathroom, but will really add that wow factor. It’s about, I suppose, creating an investment product that has owner occupier appeal for tenants, to find better tenants, and for resale in the future, so that you’re not just selling to the investor market like everyone else. You can sell to moms and dads who could walk in and go, “Man, I could actually see myself living here, and this really suits our family, and our stage of life.
Coming out of the bathroom … Again, I’m not going to talk about design too much today. I like to do a slightly more modern looking fan. A lot of the builder standard fans just look like absolute shit to me. Really ugly. Like, builders are builders. They’ve been taught how to build homes. They haven’t really been taught how to be an interior designer or to make it look architectural, or to make it look owner occupier and really trendy. Those builders that do do that, you know, I’m not talking about going and working with those custom builders that build the beautiful product that they charge you an extra two hundred grand for it. I’m talking about working with any of the big ten builders in your state or a good local builder who’s affordable, and really just going, hey, I love what you do, I love your price. You’re saving me two hundred grand, but if I spend five, ten, 15, 20,000 dollars upgrading these things, I’m going to get a much better product. You can explain to them what you want from the start, which is going to give you a lot of credibility and is going to enable you to get the product that you ultimately want that’s going to meet the market in the future as well.
So you come through the house. I like homes with beautiful, big, open plan livings at the back. Kitchen, dining, living, al fresco, for example. Maybe a pool at the back. Not for an investment property of course. This is just in my head and my dream, but I like that concept of indoor outdoor living. When we get to the back of the house and we open up to where all the fun happens and where we know that people spend 95% of their times as families, the kitchen’s very, very, very important. We like to do kitchens where there’s a back run against the wall with a nice island bench facing out towards the living dining alfresco areas.
The things that we upgrade when we’re doing it is, you could go for a laminate or a two pack cabinetry. Two pack’s more expensive. Laminate’s basically where they take the piece of wood and put the laminate on top of it. Two pack is where they actually spray the wood, so it’s a nicer finish. It’s a more premium finish, but it can be a bit expensive. With all of the drawers in the kitchen, I don’t like the look of handles. I just think they’re cheap. What we do is, we get the cabinet make to put a little angle so it can pull your fingers, like you can pull the drawers out with your fingers.
Then, all of the drawers are soft close or at least have some little rubbers in them to catch the close to make it feel like softer and more premium. We always do stone bench tops as standard. I always upgrade the kitchen sink with the mixer or the tap fitting, because again, it’s such an important part of the home. So many people see it. You can tell the difference between quality and crap so easily in finishes. In terms of taps, it’s really important to get those right, so a nice stone bench top. If you want to be cheap you can do the … Not cheap, if you want to save yourself some money because I’ve got investment properties where I’ve got thin stone. Then, I’ve got homes that I’ve built for myself which have got the thicker stone. Again, the thicker stone looks a little bit nicer to some people. A little bit more expensive, again.
In terms of the back of the property just to finish up. Again, I like to use down lights and I like to use a lot of lighting. I’ve trialled different things in different properties. Anything from the cheap Venetian blinds over the windows to the full pull down blinds, where you’ve just got one big piece of fabric that comes down from pulling the little thing. Sorry I’m not like really technical with this stuff. My wife normally handles majority of the actually implementing what I believe stuff, or what she believes stuff more importantly.
Then, we’ve also done Venetians. Venetians are a punish for tenants. They’re also a punish to clean, and they always break. Some sort of slightly better window finishing’s important. Then, in the back of the property, making sure you’ve got some … Now bi-fold doors can be very expensive. Bi-fold doors are the ones where you pull them all the way across and it’s just completely open. Sliding stacking doors can be a cheaper option where you can still get a good view. You can still have it nice and open, but it is a but more affordable. Definitely consider this stuff. Don’t just have your standard window or sliding doors at the back that look a little bit cheap.
That’s kind of the inside of the property and the things that we like to do. Again, this is a list of, a dream list of all the things. What I like to do is write down these notes, go to the builder and go, can you just price out your standard product as your builder’s standard using your standard builder finishes? Then, I would like each of the items I’ve just mentioned on a separate line item so I can see the cost of each thing that I’ve just discussed, and really begin to go, well, I would like those. I can see value in doing floor to ceiling tiling in the bathrooms. I can’t see value in doing the bigger tiles in the living areas. For two grand I’ll do that and that will save me $3,000 here. You know, start picking out your ideal home based on the things that you think would add appeal, but these are the things that do add appeal.
The last thing I wanted to add, sorry, in the master bedroom is just, some form of living, sorry, walk in room. You know, people need storage. People need space these days. Definitely look at storage options for people. Places where they can store all their crap like myself. I’ve got two kids, and a wife, a dog, and a cat, so there’s heap of stuff now. It’s not like the old days when we moved to Sydney in one car. You accumulate stuff and so do your tenants. Give them a place to store it out of reach and they won’t give you too many hassles when you’re managing their property either. Then, maybe a walk in pantry as well, or some sort of pantry in the kitchen’s very important as well because people have more stuff that they store in their kitchens these days too.
That’s the inside of the property. The outside of the property is also extremely interesting to me. There’s things that I’ve noticed that by upgrading, you definitely get a return on that investment. Looking at the property from the street and pretending that you’ve got your driveway in the front of your house there. I like to do a slightly nicer driveway. You don’t have to pay anymore money for a slightly nicer driveway. You just have to select the right colour. Then, what I do is, there’s like a paint or a seal that you can put, a gloss seal that you can put over the driveway and the exposed aggregate. Which one, protects it. Two, gives it that wet finish that kind of looks a little bit nicer and a little bit more premium. It’s like literally an extra 150 bucks to put that over the top. Most of the time the builder will throw it in for you. That can be nice.
Builders love to chuck in shitty grass. It’s like, it’s not my property. I’ll get the cheapest grass. That’s one way they save and make money as well. Do yourself a favour and do some decent grass. Some Sir Walter, some Buffalo. Something that’s going to be hearty for your tenants that bring dogs in. Everyone’s got a pet these days. Just deal with it. Something that’s going to last. Something that’s going to look good. Something that doesn’t need much water once it’s actually been watered in in that first month period. That’s going to grow year round and look green and nice for you, that kids can play on without too many dramas, that don’t get a huge amount of bindi weed. Some form of Buffalo that just grows like an absolute weed and looks amazing. It might cost you an extra 300 bucks for the whole property, but it’s absolutely worth it.
I generally like to make at least the very front of the house where the people can see it from the street look great. I might spend a little bit of money upgrading the garage door, for example, or I might render the front. I might make it look a little bit architectural with some sort of skillion roof, or some nicer looking design. I’ll make it nice and flat at the front. A little bit boxy. Sort of a little bit more trendy. A little bit more modern. It does cost a little bit to upgrade that, but again, it’s the street appeal.
It’s the first thing that primarily the men, because when you’re looking at properties, based on the research that I’ve done in the past, males care about what the property looks like from the street and how good their backyard is. The ladies care about living in the property and the quality of the kitchens and the bathrooms. To appeal to both audiences and the widest possible tenant base, as well as future owner occupier base, it’s important to get both of those things right, but make it look a little bit nicer.
Then, I suppose coming around the backyard, like walking through the house and then opening up through the backyard, an al fresco or some sort of deck is very important these days. A lot of builders as standard just do a concrete slab out there. It looks a bit average. Spend a little bit of extra money and tile it. Hopefully, with the same tiles that you’re doing internally. My wife and I for $300 just put a non slick, nonslip solution over the top of the tiles near our pool in our new house. Whether it’s raining or whether the kids have just jumped out of the pool, you know, you can’t see it. You can’t feel it. It’s not sandy. It’s just this awesome solution that lasts for ten years that you can put over the top of the internal tiles. It protects them and stops people falling on their ass on them.
Then, making sure you do some form of landscaping on the outside of the house too. Even if it’s an investor product in a cheap area, most people just lay down shitty grass and forget to landscape. Do those little things. Put in a couple garden beds. Put some mulch in there. Put some trays, that again, after you water them in, lasts forever, that are going to look nice, that are going to be low maintenance for your tenants. These are some of the things that I think are important when you’re considering this stuff. These days it’s all about owner occupier appeal and creating a product that someone, a young family, a mature family, a young couple can aspire to have.
You don’t have to spend much more money. You can get all of the things that I just talked about thrown in for about 20 grand, or you can cut it back to the five or ten grand of extra things that you think would be important, but these things make a massive difference to a property over time. You’ll always get premium rent for a premium property. You’ll always get a better retail and revaluation from a more premium property. These are sort of simple things that you can do. You don’t have to work with the best builder in town or the most expensive builder in town to implement this stuff and to get yourself a great result. I hope you got some value out of today’s video, which was all about what upgrades should you consider when buying an investment property. I really appreciate your time. Until next time, stay hungry.