If you own an Investment Property and it is feeling tired, run- down and in need of a bit of a makeover, you’d be crazy NOT to renovate! Investors, Property Managers, Real Estates and Tenants will all benefit from a renovated property. Let’s discuss the benefits of renovating:
Property Owners: The property’s value will improve. This increase in equity may be leveraged for other projects. Or, if renovating in preparation to sell, a higher price can be achieved. The Owner will enjoy fewer maintenance issues with a newer, freshly updated home in contrast to an older, run-down one; essentially, a nicer place to call home.
Better Tenants: It’s common knowledge that, the better the property, the better quality tenant you attract. Often, the higher an income bracket, the more money there is available to spend on a quality rental property. Would you rather be selecting from prospective renters who can afford your old, dilapidated house at $350/week or would you rather sort through rental applications of those who want a clean, new, well presented home at $550/week?
Real Estates benefit too: The Estate Agent selling the property will benefit from an increased commission from a more valuable property, not to mention how much easier it will be to attract quality buyers. If the property is being rented, the Real Estate Agency will take a percentage commission from a higher rent. Estate Agents, take note: Imagine if all the properties on your Rent Roll were renovated and rented out at a higher price per week?
No out-of-pocket expense: If you are a home owner who already has equity in their home, you may even be able to leverage your equity to fund the renovation. In many cases, the increased rent far outweighs the cost of the renovation, when broken down to a weekly repayment, meaning you are actually MAKING money!
Don’t forget Depreciation: If you DO renovate your house, always engage the services of a qualified Quantity Surveyor. They will ensure you are able to maximise any tax deductions you are entitled to. It is also important to speak to your accountant, as in some cases, you can actually claim the full amount of a restoration, should it fall under that category.
There are so many benefits to renovating your Investment Property. If you’re having trouble persuading your Owners/ Investors to update or even maintain their property, feel free to contact us for advise- we’re more than happy to help.