Hi i would like to know what some of you do to get more rent from a renter cause i’m lookin at a porperty at the moment the numbers work the only thing is that it is in an bad part of town and it hasn’t been rented for 4 months. I was thinking doing a bit of work to it but no matter how much work i do it is still in the same area of town any ideas would be great.
Thanks Rob[8D]
Hi Robert,
With such a general question it is a bit hard to suggest what needs doing to your property. There are so many things you can do. I feel from what youve said, the most important thing is that you have to find a tenant.
If you are using a real estate agent then get rid of them and find one who will at least give you a couple of pointers if they cant rent your house for you.
It pays to have professional management.
In regard to the house, you need a clutter free, tidy, low maintenace yard. It has to be at least a little appealing on the eye, no loose panels or different colour roof sheets etc. The interior doesnt have to be spot on , but it must be CLEAN, especially the bathroom , kitchen etc.
As for the area, theres not really too much you can do, unless you also live in the area. If you do, you can always start up a local street party, even if its just your street, where everyone helps each other out ie renovations, gardening, improvements etc. You may find the whole neighborhood might join in. Before long it may be the best part of town.
If that doesnt work , sell it, and find a more suitable vehicle for your investment dreams.
thanks for the advise it is a 2 bed room unit in a block of 4 which rents for $115 per week and is for sale for $45’000 and they really want to sell i also get to use the fhbg. the body corpate and rates are $1450 a year.
Thanks Rob[8D]
Nice return, just remember that net return compensates for lack of quality and desirability.
How long has the property been on the market?
When was the last unit in the block sold and how much?
Is there the possibility of increasing the value through renovation?
And if they are keen to get rid of it, find out why. You may be able to get it for a steal. Id start with an offer of about $35K and bargain from there.
You make the most of your equity in the short term when you buy!hi it’s been on the market for 3 months i offered $37000 today. unit 2 sold on Thursday for $50 000 yes i believe i can make money though renovation and i’m a cabenit maker so that helps.
Thanks Rob[8D]
G’day Rob,
My simple suggestion is to replace all the power points and light switches with new ones.
You don’t have to buy fancy ones – just cheapies at the local hardware shop is enough.
A coat of paint and new power points and light swtiches can make an old place look so much better very quickly and cheaply – thus increasing both desirablilty and rental income.
I hope this helps,
BDM
hi everyone I bought this property to for $41000 This is my first and I’m so happy i’m now in the game. I’d like to thank everyone for there knowledge it has help me heaps.
Thanks Rob[8D]
Congrats Rob well done. Those figures look pretty good and certainly with a bit of a polish you should find the vacancy factor manageble.
I would check those body corporate fees as this seems somewhat high. If it is common water then there may be a water leak. Get a budget/last years expenses from the manager. Simple check.
Cheers
Hi Rob
A hint to getting the tenant once you have completed your rejuvenation. Movie Tickets. The best advice Steve has ever given.
Couldn’t get a tenant for 3 months – had a very lazy Agent.
Changed Agents and offered Movie Tickets. Got a tenant within 3 days of new Agent advertising.Good luck
Nessiehi the body corpate is $300 a year and rates is $577 half a year.
thanks for the advice Nessie I was going to do that if i find it hard to get tenants.
Was everyone nerveous on there first deal or is it just me cause i hope it all works out to plan.cause my parents believe in working hard to make money they think i’m doing the wrong thing no matter how hard i try to explain it to them they still think it won’t work.
Thanks Rob
Hi Rob
No doubt you have done the figures but they are great.
price = $41,000
costs? = $1,000
purchase = $42,000
loan = $32,000rent = $5980pa
rates + levies = $1500
loan costs(6%) =$1920
maint = $500pa
pm = $500paincome = rent – (rates + loan costs + maint + pm)
income = 5980 – (1500 + 1920 + 500 + 500)
= 1560deposit + cost = $10000
return on this is 15.6%So given that I have assumed a number of figures your cash on cash return is $1560 on the $10,000 which is 15.6% return (better than the bank)
Your gross return which is simply the rent divided by the total purchase cost is 14.2%.
So all up not a bad little investment. The only risk is the vacancy factor but your holding costs are only $75 pw. Any immediate capital gain could be doubtful although you mention that another unit went for $50k so depending on the variables you may have a paper profit of $8k.
Cheers
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