Strategic Renovations: Turn Properties into Profit Assets

• Buy below market value and renovate strategically to unlock rental growth and immediate equity gains.
• Focus renovation spend on kitchens, bathrooms, lighting and finishes that drive tenant demand and higher occupancy.
• Avoid overcapitalising by renovating for your target tenant, not for personal taste.

Renovation as a wealth strategy

At a recent investor evening, Michael Rehder of Advanced Design and Maintenance shared a practical reality many investors overlook: property value is not only created when markets rise, it is often created through smart renovation decisions.

Many investors search for move-in-ready properties. But the real opportunity often lies in older properties needing upgrades, where competition is lower and pricing more negotiable.

As Michael explained, investors who are willing to buy properties needing work can secure assets below market value and then strategically renovate to unlock rental growth and equity.

The key is not simply renovating, but renovating wisely.

Step 1: Buy Smart - Value is created at purchase

‍Michael emphasised a principle seasoned investors know well:
You make your money when you buy.

Properties listed at a certain price are rarely sold at that price. Negotiation, combined with a proper renovation assessment before purchase, can significantly reduce acquisition costs.

Investors who inspect properties with renovation professionals can identify defects, worn kitchens, damaged finishes, outdated fittings or moisture issues and use these factors to negotiate a better purchase price.

Buying correctly creates instant value before renovation even begins.

Step 2: Renovate for returns, not emotion

A common investor mistake is renovating a rental property as if they were going to live in it themselves.

Michael warns that emotional renovations quickly destroy returns. A R1 million property renovated with R500,000 of premium finishes for a student rental market rarely produces matching rental returns.

The renovation must match the tenant profile and rental bracket. The goal is improved appeal and durability, not luxury.

Step 3: Focus on high-impact areas

‍Not all renovations add equal value. The biggest visual and rental impact usually comes from:
Kitchens

‍Often the emotional centre of a home, kitchens strongly influence tenant decisions. Simple upgrades such as repainting cupboard doors, replacing countertops, improving lighting, and modernising appliances can transform a space without rebuilding it.

Bathrooms

‍Modern, clean bathrooms significantly increase tenant appeal. Converting unused baths into walk-in showers often improves functionality while reducing maintenance costs.

Lighting

‍Affordable LED lighting and under-cabinet lights instantly modernise older units and improve listing photos, a major advantage online.

Step 4: Renovate smarter, not bigger

Michael demonstrated how many upgrades don’t require full replacements.

Existing kitchen cupboards often remain structurally sound and only need repainting and new hardware. Countertops can be replaced while retaining cabinetry. Layout changes should be avoided where plumbing relocation becomes expensive.

Similarly, bathrooms can often be modernised without relocating fixtures, saving substantial costs.

Strategic renovation means improving appearance and functionality while controlling budget.

Step 5: Refresh finishes that date a property

‍Small details dramatically affect tenant perception:

• Fresh modern paint replaces outdated colour schemes
• Neutral flooring outperforms trendy options that age quickly
• Updated light switches, plugs and fixtures modernise units at low cost

Michael highlighted that neutral, durable finishes protect investors from future renovation cycles driven by changing design trends.

Step 6: Design for maintenance efficiency

‍Renovation decisions should also reduce future maintenance costs.

Examples include:

• Installing durable flooring rather than carpets
• Removing baths in rental units where tenants prefer showers
• Choosing easy-to-replace appliances rather than costly repairs

Every maintenance saving improves long-term profitability.

Step 7: Unlock rental growth through reconfiguration

One of the strongest value-add strategies shared involved reconfiguring properties rather than simply upgrading them.

Michael showcased projects where:

• Single houses were converted into multiple rentable units
• Large apartments were redesigned to add extra bedrooms and bathrooms
• Multi-let configurations significantly increased rental income

In one Johannesburg example, a R1.6 million property renovated for R450,000 was reconfigured into multiple units generating approximately R34,000 per month in rental income.

In another case, a two-bedroom apartment was converted into a four-bedroom shared rental, dramatically increasing demand and income.

Smart layout changes often outperform cosmetic upgrades.

Step 8: Renovate for the market, not trends

‍Michael stressed the importance of timeless design choices.

Trendy colours and finishes may look appealing now but quickly date properties and require costly updates later.

Neutral, modern and durable finishes ensure properties remain attractive across multiple rental cycles.

Renovation as a strategic investment tool

‍Strategic renovations are not about spending the most money,  they are about spending money in the right places.

Investors who buy below market value, renovate selectively, modernise key spaces, and optimise layouts consistently outperform passive investors waiting for market growth.

Done correctly, renovations deliver:

• Higher rental income
• Faster tenant placement
• Lower maintenance costs
• Immediate value uplift
• Stronger long-term returns

As Michael’s presentation highlighted, smart renovations turn ordinary properties into high-performing investment assets.

And in competitive markets, that strategic edge often makes the difference between average and exceptional investment performance.

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