I am contemplating purchasing a new IP (3 bedroom house which has been recently painted) in WA and the rental manager who is doing rent appraisal says it will never go for more than 160/week even if i build another carport for the property. Well, I’ve got some ideas (with budget of $5K) to increase it to 200/week but want opinions of fellow forum contributors:
1) pave backyard so as to minimize maintenance by tenant?
2) replace old A/C unit at each room with central A/C that saves electricity bills
3) take out carpet and tile the lounge and hallway
4) or a more radical idea is to increase my borrowing and subdivide the backyard and just sell off the extra land to builder so they can build a unit
Cheers
johnWant to join financial independence before 31 years old, currently 25
hey, this may be a money making opportunity.
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Hey,
The fatal flaw in your theory is that these are all things that you think might increase then rent.
Personally, I do it differently… before letting the property interview the prospects and offer them:
1. A base rent ($160 per week)
2. A list of improvements and the additional weekly rental cost.For example:
Weekly Rent (not negotiable): $160
+ Tick which combo offer you would like:
[ ] Movies at Home <Pay TV> (+12 per week)
[ ] Secure garage (+20 per week)
[ ] Breezy Comfort <Ceiling fans> (+$5 per week)
[ ] Speedy-Net <Boradband Internet> (+$10 per week)etc etc
That way you spend your money in a way that will increase the rent according to what the tenant (rather than you) wants!
Remember to sell the benefit rather than just the feature. E.g.
Be cool in summer <new air con> (+10 per week)
etc etc
Cheers,
Steve McKnight
**********
Remember that success comes from doing things differently.
**********Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
Steve
Let me try to understand this theory. Rather than me trying to second guess what the potential tenants want (which can differ from individual to individual), I offer them the basics (which is 160/week as what the rental appraisal says) and then offer them extra benefits (provided that the property is in a livable stage)?
thanks
johnWant to join financial independence before 31 years old, currently 25
You got in John… that way you’re not second guessing the market.
Cheers,
Steve McKnight
**********
Remember that success comes from doing things differently.
**********Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
Hi All
Great advise I will try that.
KerwynOriginally posted by jcls79:Well, I’ve got some ideas (with budget of $5K) to increase it to 200/week but want opinions of fellow forum contributors:
1) pave backyard so as to minimize maintenance by tenant?
Negligible benefit for a tenant.
2) replace old A/C unit at each room with central A/C that saves electricity bills
An evaporative unit would put you back around $3K+ excluding removal and/or fitting costs.
Ducted reverse cycle units (if that is what you are considering) twice/three times this figure.
3) take out carpet and tile the lounge and hallway
I am not sure that a 25% increase in rent will be achieved through the combination of the suggestions – not will you fit many of them within the $5K budget.
Your PM will know what is achievable – and based on their comments you may be seeking a rent rise that isn’t sustainable in the local area.
Derek
[email protected]
0409 882 958
Property investment advice and researched property in quality locations available.Derek the impossible is achievable on $5k and some imagination. The lift a small place gets from some really simple things like a rangehood, bathroom exhaust fan, toilet seat(white and clean) and a new shower head(low flow). The rangehood for $89, the fan for $15, the toilet seat for $20 and the shower head a furhther $20. The paint for a 2 bed townhouse should be around the $600 mark including brushes and rollers, tiling kitchen. laundry and 6 tiles for entry area, try $217 for tiles and $300 to lay by a fantastic professional who cleans up too.
Carpet for a lounge and 2 bedrooms upstairs $900, new curtains custom made and installed $560, new clothes dryer for $ 350 and a new vanity for $280 with taps for $55 the set.
Sparkie $300 fixed a lot of small stuff too, plumber did all that was needed and a leaky sink too for $380 and you do get a lot done and all in 1 week and damn, there is change from your $5k reno.
I got a $50/wk rent hike too so all you think can be done , can actually be done. If you think it cant then…………..oops.
DD
PS146 Certified Financial Planner and Buyers Agent
Don’t sweat the small stuff,and it’s all small stuff!!Derek has a very good point. You can achieve some very good results on a budget but it take a bit more than just waiving your cheque book over the yellow pages.
.
5k is probably on the mark if spent wisely. I can’t really see the benefit of paving yards and doing decks etc unless you are going for resale(immediate). Paint and fittings are the go.
.
Good Luck.Don Nicolussi | Mortgage Broker - Home Loan Warehouse
http://homeloanwarehouse.com.au
Email Me | Phone Me"I think of finance as a technology, a way of getting things done." Robert Shiller
You may want to ask the managing agent why he thinks $160/wk is the limit. Theoretically he should know the market he is operating in?
Let us know how you go.
Anne.
Suggest seeking an independent rent appraisal on your property, this way you are not relying on one property managers opinion, educated or not…
Hope this helps.
Cheers,
GeoffBmy PM said I would never achieve $150/wk in my pet area, now the latest reno has nabbed $160 they mumble something and change the subject very quickly.
Good Luck and try anyway.
DD
PS146 Certified Financial Planner and Buyers Agent
Don’t sweat the small stuff,and it’s all small stuff!!
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