Get the best return from your investment
Deciding to invest in a property is a major decision. Having made that decision, it is vital to maximise that investment.
Here are some great tips that will help you to do just that.
Here are nine of the best tips to help you boost your investment, courtesy of Your Investment Property magazine.
1. Good presentation
Good presentation is the key to maximising return on a property investment. A well presented property attracts interest and creates increased competition among prospective tenants, enhancing the prospects of a higher rental return.
2. First impressions
First impressions are critical. A fresh, clean and cheery property arouses interest and creates the conditions for the best rent.
3. Tidy up between tenants
When a rental property becomes vacant it pays dividends to look at it through the eyes of a tenant and note anything that requires attention. Nothing turns prospective tenants off a property more quickly than scuffed or dirty paintwork, stained carpets or a door hanging by one hinge.
4. Good services
It is important to make sure appliances, electrical fittings and hot water services are safe and functioning efficiently. Dripping taps, broken doors, loose window locks and cracked glass must be repaired.
The outside shouldn’t be overlooked either, since that’s what the prospective tenant sees first.
5. Use neutral colours
If improvements such as new carpets or painting are considered necessary, it’s preferable to use neutral colours that will fit with most people’s taste rather than bold fashion statements that may be off-putting to some would-be tenants.
6. Consider an internal laundry
It isn’t necessary to spend thousands of dollars to make a rental property attractive. An internal laundry is a relatively simple and inexpensive improvement for landlords to make, and it can pay significant dividends in terms of higher rental revenue as it will make the property more appealing to prospective tenants.
7. Renovate selectively
Before spending a substantial amount of money on renovations, it is advisable to seek professional advice about the likely benefit, both in terms of increased rental and the property’s potential to provide greater capital growth in the future.
8. Regular maintenance
It also makes good sense to maintain properties in tip-top condition throughout a tenancy in order to retain good tenants. This will optimise the likelihood of success with rent reviews and lessen the chances of having to outlay large sums of money to bring the premises up to scratch when it is vacated.
9. Be realistic
Above all, investors need to be realistic about rents and understand exactly where their property fits into the marketplace. Just as vendors often have an inflated idea of the worth of their home; landlords can have unrealistic expectations that can sour the property investment experience for them.
Renovation activity likely to increase
Property value growth over the second half of 2010 is expected to be fairly modest, according to RP Data Research.
This means that many home owners will look to add value through renovation.
With the rate of property value growth slowing, sales volumes falling and construction of new housing continuing to soften, RP Data Research are forecasting an increase in the number of homes undergoing renovation over the coming months as owner occupiers and investors seek to increase the value of their existing properties.
Over the June quarter of 2010 property value growth has slowed and sales activity has begun to fall. These conditions suggest that many home owners may be more likely to remain in their current residence rather than sell and move.
Building approvals down
Although building commencements data was still reasonably positive up to the March quarter of this year, building approvals have been trending lower since March and are now down -19.5% over the three to June.
Owner occupier housing finance commitments for the construction of new dwellings and for the purchase of new dwellings is down -23.6% and -13.7% respectively over the year indicating that there are far fewer opportunities for those looking to buy a brand new home. A brand new home will essentially have everything the purchaser needs and not require any improvement (at least in the short term).
Renovating activity up
When comparing the Australian Bureau of Statistics (ABS) data for June 2009 to June 2010, the total value of building approvals for alterations and additions (including refurbishment and conversion) has increased by 13.8% to more than $520 million during the month.
Renovation activity comes in many shapes and sizes and includes:
- major renovations where owners add additional rooms to a house,
- moderate renovations such as a new kitchen or bathroom, or
- minor renovations such as re-painting or re-tiling rooms.
Equity available
For anyone that has owned since the beginning of the price surge at the beginning of 2009, they are likely to have more than enough equity to undertake some property improvements to their current home.
If you would to explore how you could access the equity in your home to undertake some renovations, please get in touch.