Building an Investment Property? Why the Right Inclusions Matter

When building an investment property, it is tempting to choose the cheapest available inclusions. Entry-level flooring, basic kitchen cabinetry and standard bathroom finishes can reduce the contract price and make the initial budget look more attractive.

However, the cheapest inclusions at construction stage can become some of the most expensive items to maintain or replace once the property is tenanted.

An investment property is not simply a new home. It is an income-producing asset that may pass through multiple tenancies. Its finishes must withstand daily use, spills, moisture, cleaning products, furniture being moved in and out, tenant changeovers and occasional misuse.

The relevant question is not simply:

“How much does this inclusion cost today?”

The better question is:

“How well will it perform after several years of rental use?”

Rental properties experience a different pattern of use

Many tenants look after their rental homes extremely well. However, tenants do not always have the same long-term financial incentive to protect every surface and fitting as an owner-occupier.

An owner may immediately wipe water from the edge of a kitchen cabinet, investigate a small leak under the sink, avoid placing wet items near a benchtop joint or report the first sign of mould or moisture. A tenant may not notice the issue, may consider it minor or may delay reporting it until visible damage has already developed.

Rental properties also experience additional wear from regular inspections, professional cleaning, tenant changeovers and furniture or appliances being moved in and out.

This does not mean that every investment property needs the most expensive finish in every room. It means that the inclusions should be selected to tolerate realistic rental conditions rather than depend on every occupant exercising perfect care.

Why the owner carries most of the long-term risk

There is an important difference between the financial interests of an owner and those of a tenant.

Under NSW tenancy rules, tenants are responsible for damage caused by negligent, irresponsible or intentional actions, but they are not responsible for fair wear and tear. Normal deterioration resulting from ordinary use remains part of the owner’s long-term maintenance responsibility.

This distinction is not always straightforward in practice. A worn surface, marked wall, deteriorated cabinet edge or damaged floor covering may involve a combination of age, ordinary use and tenant behaviour. Even where the owner believes the tenant has caused the damage, proving the full extent of the tenant’s liability may require clear entry and exit condition reports, photographs, quotes, invoices and other supporting evidence.

From a tenant’s perspective, the most immediate financial consequence may appear to be the loss of some or all of the rental bond. In NSW, the bond cannot generally exceed four weeks’ rent.

A tenant’s legal liability can extend beyond the bond where they have caused damage. However, if the claim is disputed, the owner may need to provide condition reports and evidence of the repair cost and may ultimately need to pursue compensation through the NSW Civil and Administrative Tribunal.

The practical result is that a tenant may lose the bond while the owner is still left with a repair bill that is considerably higher. The owner may also carry the cost of arranging access, obtaining evidence, managing the dispute and keeping the property vacant while the work is completed.

This is why an investment property should not be designed on the assumption that any future damage can simply be recovered from the tenant.

Durable inclusions are a form of risk management. They reduce the owner’s reliance on perfect tenant behaviour and limit the financial consequences when the property is not treated as carefully as an owner would treat their own home.

Kitchen cabinetry can become an expensive problem

The kitchen is one of the most heavily used areas in a rental property. It is also one of the most expensive areas to repair.

Low-cost laminated cabinet doors and panels can be vulnerable to repeated moisture exposure, particularly around sinks, dishwashers, kettles and cleaning areas. Once water enters an exposed edge or joint, the underlying material may begin to swell. Cabinet doors and panels can bulge, separate or lose their original shape.

This type of damage cannot usually be corrected with cleaning or a simple coat of paint. The affected door, end panel or cabinet section may need to be replaced.

Replacing one damaged panel may also be more complicated than it appears. The original colour, texture or profile may no longer be available. A new panel may look noticeably different from the surrounding cabinetry, particularly after the original kitchen has been exposed to sunlight and normal use for several years. Several panels may therefore need to be replaced to restore a consistent appearance.

For the investment homes we build and subsequently rent out, we prefer polyurethane kitchen cabinets with painted edges and corners. The purpose is not to add luxury for its own sake. It is to provide a more durable finish that is better suited to long-term rental use.

The right benchtop can prevent moisture-related replacement

The same principle applies to kitchen benchtops.

A laminated benchtop may initially be less expensive, but it can become vulnerable when water reaches a joint, edge or damaged section of the surface. Once the substrate swells, the damage is often permanent.

A stone benchtop has a higher upfront cost, but it does not have the same moisture-sensitive laminated substrate. It is generally better suited to the repeated cleaning, spills and everyday use expected in an investment property.

We use 40 mm stone benchtops because they provide both a durable working surface and a higher-quality presentation. For an investment property, this is not merely a cosmetic upgrade. It removes one of the common weak points found in budget kitchens.

The comparison should therefore not be limited to the difference in construction price. It should include the likelihood of future damage, the cost of removal and replacement, the availability of matching materials and the potential loss of rent while the kitchen is being repaired.

Carpet may be inexpensive, but stains can make it costly

Carpet can look attractive when a property is first completed, but it is particularly vulnerable in rental homes.

Spilled drinks, food, cosmetics, shoes, pets and everyday traffic can leave permanent stains. Carpet may also retain odours or develop visible wear in hallways, living areas and bedroom entrances.

Professional cleaning does not always restore badly stained carpet. Replacing only the damaged section can also be difficult because the new carpet may not match the colour, texture or level of wear of the surrounding material.

As a result, one badly stained area can lead to the replacement of the carpet throughout an entire room.

The tenant may lose part or all of the bond, but the cost of removing the old carpet, preparing the floor and installing new flooring can still be much higher. The owner may also need to complete the work before the property can be presented to the next tenant.

For this reason, we recommend hard-wearing hybrid flooring for investment homes. It is easier to clean between tenancies, less vulnerable to permanent staining and more practical when furniture is moved in and out.

The additional construction cost should be compared with the potential cost of repeated carpet cleaning and replacement over the life of the investment.

Kitchen ventilation protects the surrounding finishes

A rangehood is often treated as a basic appliance, but its design can affect the condition of the entire kitchen.

A basic recirculating or unvented rangehood does not remove cooking steam, moisture and grease from the home as effectively as a properly ducted system. Over time, residue can settle on cabinet doors, walls, ceilings and nearby fittings.

This may result in more intensive cleaning, discolouration and premature deterioration of kitchen finishes. Moisture from cooking can also add to the risk faced by lower-quality cabinet doors and panels.

A ducted rangehood directs cooking vapour outside the home. It improves ventilation while helping to protect the cabinetry and surrounding surfaces.

For an investment property, a ducted rangehood should not be considered merely an appliance upgrade. It is part of the strategy for extending the service life of the kitchen.

Bathroom inclusions can prevent recurring maintenance

Bathrooms are another area where low-cost inclusions can create ongoing expenses.

Painted bathroom walls may mark, peel or require repeated repainting in a high-moisture environment. Floor-to-ceiling tiling provides a hard-wearing and easy-to-clean surface while substantially reducing the area of painted wall requiring maintenance.

Built-in wall niches are another practical inclusion. They give tenants somewhere to store shampoo and bathroom products without installing adhesive shelves or drilling into tiled walls. Preventing unnecessary penetrations helps preserve both the appearance of the bathroom and the integrity of the tiled area.

The shower-screen design should also be considered. Hinged frameless shower screens avoid some of the recurring maintenance problems associated with sliding doors and rails. Sliding components can become difficult to clean, wear over time or come off their tracks, resulting in tenant complaints and handyman visits.

Bath design can also affect maintenance. Sealant around some integrated baths may deteriorate, allowing moisture to collect in poorly ventilated junctions and potentially creating unpleasant mould-related smells. A properly detailed stand-alone bath provides ventilation around the fixture and avoids some of the concealed junctions associated with built-in designs.

Even the floor waste can make a difference. A practical tile floor waste can reduce clogging issues and make routine cleaning easier.

Individually, these details may appear minor. Across several bathrooms and multiple tenancies, however, they can substantially reduce maintenance.

Window coverings should be selected for rental use

Window coverings are frequently included as an afterthought, but they are handled every day and can be easily damaged.

Basic vertical blinds can become misaligned, lose individual slats or require repeated adjustment. Replacing only part of an older blind may also result in mismatched colours.

Durable zebra blinds provide a modern appearance while helping to reduce future replacement costs. They also give tenants practical control over privacy and natural light, improving the everyday usability of the home.

As with flooring and cabinetry, the objective is to choose a product that will continue to operate and present well after repeated use.

The real cost of maintenance is more than the repair invoice

A damaged inclusion does not cost the owner only the price of the replacement material.

Each maintenance issue may require:

• communication with the tenant and property manager
• photographs, condition reports and evidence
• access arrangements
• quotes and trade appointments
• ordering replacement materials
• follow-up inspections
• cleaning after the work
• management of a bond claim or dispute
• a delay before the property can be leased again

A swollen cabinet door, damaged shower screen or stained floor covering may appear to be a relatively small issue. However, repeated call-outs and tenant changeover repairs can have a material effect on the property’s net return.

Selecting durable inclusions at construction stage reduces the number of components that are likely to fail, become damaged or require frequent adjustment.

The right inclusions can also attract better tenants

Investment inclusions should not be selected only to survive wear and damage. They should also help the property compete for suitable tenants.

Features such as zoned ducted air conditioning, double-glazed windows, additional power points, practical wardrobe shelving, useful laundry cabinetry, additional lighting and an automatic garage door can make a home more comfortable and functional.

These features may help the property stand out against comparable rentals. They can strengthen its presentation, support tenant satisfaction and make the home more attractive to people looking for a longer-term tenancy.

A durable property that is comfortable and well designed is more likely to remain competitive throughout multiple tenancy cycles.

However, expensive does not automatically mean suitable for an investment property. Every inclusion should provide at least one practical benefit. It should improve durability, reduce maintenance, make the property easier to clean or increase its appeal to prospective tenants.

How we select inclusions for investment homes

Based on our experience renting out homes that we have built, we recommend materials for real tenancy conditions rather than showroom appearance alone.

When selecting inclusions, we consider:

• how the material responds to water, stains, heat and impact
• whether it depends on careful daily maintenance
• how easily it can be cleaned between tenancies
• whether local damage can be repaired without replacing the entire installation
• whether matching replacement parts are likely to remain available
• how frequently the inclusion may generate maintenance call-outs
• whether the inclusion protects surrounding materials
• whether it improves the property’s appeal to prospective tenants

This approach may include stone benchtops instead of moisture-sensitive laminated surfaces, polyurethane cabinetry instead of basic laminated cabinets, hybrid flooring instead of carpet, a ducted rangehood, floor-to-ceiling bathroom tiling, hinged shower screens, durable window coverings and practical built-in storage.

These are not simply aesthetic upgrades. They are decisions intended to reduce future expenditure and protect the presentation and earning capacity of the property.

Review the inclusions schedule before signing

Before entering into a building contract, the inclusions schedule should be reviewed line by line.

General descriptions such as “kitchen included”, “floor coverings included” or “rangehood supplied” do not provide enough information to assess long-term performance.

The schedule should clearly identify:

• the cabinet finish and edge treatment
• the benchtop material and thickness
• the type of flooring used in each room
• whether the rangehood is ducted outside
• the extent of bathroom tiling
• the type and operating mechanism of each shower screen
• whether bathroom wall niches are included
• the type of window coverings
• the wardrobe shelving and storage configuration
• the laundry cabinetry
• the number and location of power points
• the air-conditioning system and zoning
• whether the garage door is automatic

These details can have a significant effect on maintenance costs, tenant satisfaction and the property’s long-term rental performance.

The cheapest inclusion is only cheap if it lasts

Reducing the initial construction cost is important, but it should not be achieved by selecting materials that may need to be repaired or replaced after only a few tenancies.

An investment property does not require the most expensive possible finish in every area. It requires careful spending in the areas most exposed to moisture, stains, impact, repeated cleaning and intensive daily use.

The owner carries the long-term maintenance risk. Fair wear and tear cannot simply be charged to the tenant, and even where the tenant has caused damage, the bond may cover only part of the cost.

Spending selectively on the right inclusions at construction stage can help prevent swollen kitchen cabinets, damaged laminated benchtops, permanently stained carpet, peeling bathroom walls and repeated maintenance call-outs.

The goal is not to build the most expensive property. It is to build a resilient investment asset that continues to look good, function properly and generate rental income without avoidable repair costs.

The right inclusions are not merely upgrades. They are part of the investment strategy.

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