Air Conditioner in Investment Property (Unit)

Hi all,

Just want to see what the views are on installing an air conditioner into an IP.

My sister has purchased a unit in Campsie (guess you could call it in Sydney's Inner West these days).

Unit is probably built around 1970's, so its the older red brick style ones.

Inside we have made the following renovations:

1. Ripped out old kitchen, retiled kitchen and put in new kitchen with poly doors and granite benchtop.
2. Toilet has been completely redone as well with tiles floor to ceiling.
3. New paint, new lights, new light switches, new power points, new door handles.
4. New curtains
5. New built in wardrobes.


The old stuff that was retained

1. Existing floors were tiled (whitish tiles), so these were left alone as they looked ok.
2. Windows and doors, other than repainting doors, these have not be replaced.

So overall, I would say the unit looks quite modern (other than the crappy door that opens on to the balcony).

Question is, should an air con be installed. I've noticed the other units in the street don't have air cons, but Im wondering whether installing one will attract better quality tenants (hopefully with minimal hassle and less turnover).

The numbers I've thought about are along the lines of

- $1,500 for 3.2kw Daikin unit fully installed
- By having an A/C i attract a better quality tenant and one who wont move every 12 months.
- So in the initial period, i might be able to rent it out 2 weeks faster (hence saving me $800).
- I hopefully wont have to find another tenant in 12 months time (saving me $440).
- As a result, the place may not be vacant for a period of 2 weeks (another $800 saving).

So $800 + $440 + $800 = $2,040.

An initial investment of $1,500 vs loss rent of $2,040 over 2 years.

Am i being unrealistic with my calculations and just wasting my time?
 
My guess is aircon 'may' make a difference. But, I would advise against the top model aircon (aka daikin). Mitsubishi/Actrons are cheaper and will last as long and I would go with those for an IP.
 
My guess is aircon 'may' make a difference. But, I would advise against the top model aircon (aka daikin). Mitsubishi/Actrons are cheaper and will last as long and I would go with those for an IP.

At the place i go to, Panasonic, Mitsubishi, Daikin, Fujitsu are all with $100 of each other for 3.5kw.

The cheapest option is samsung which is about $250 saving... but im not willing to use that.

Actrons I havent seen in a split system. But given 40-50% of the cost of an air con is in the install, why cheap out by $100 and have issues later.
 
*snip*
So $800 + $440 + $800 = $2,040.

An initial investment of $1,500 vs loss rent of $2,040 over 2 years.

Am i being unrealistic with my calculations and just wasting my time?

And you might get $5-$20 (?) a week more = $250-$1000pa more rent.

And you depreciate the A/C, so get back a bit more on tax, and if you purchase it with borrowed money then there is more deductions.
 
Question is, should an air con be installed. I've noticed the other units in the street don't have air cons, but Im wondering whether installing one will attract better quality tenants (hopefully with minimal hassle and less turnover).

I think the idea that you will attract better quality tenants with an air con is probably a long shot, but if there are a number of similar units available to rent and yours is the only with air con you will stand a better chance of getting a tenant.
 
Aircon will make it more rentable, and may add a small amount of rental return ($5 or maybe $10 a week).

Aircon is very desirable for tenants with young children who dont do so well in hot units.
 
Landlords have to know which renovation will create more cash flow and try to avoid the tendency of overcapitalizing. Do some market research . I think putting air-conditioning especially in harsh climate will make the property more rentable. And if other property don’t have air-conditioning then it is your advantage.
 
At the place i go to, Panasonic, Mitsubishi, Daikin, Fujitsu are all with $100 of each other for 3.5kw.

Probably need to look elsewhere then. There is almost $300-500 difference between Daikins and other brands. But, at the end its your choice. The repairs and maintenance of Daikins are expensive too.

Based on my research, Actrons are cheap cos they are not a worldwide brand. But they are made to Aus standards.
 
Another question is, can you install an A/C? As you will probably need to go through body corp for approval.

This could be why the other places don't have it.

If you can get A/C though it is definitely the way to go IMHO.
 
Probably need to look elsewhere then. There is almost $300-500 difference between Daikins and other brands. But, at the end its your choice. The repairs and maintenance of Daikins are expensive too.

Based on my research, Actrons are cheap cos they are not a worldwide brand. But they are made to Aus standards.

I have... there is a different of $300-$500 between daikins and other brands.... if i shop at a different store.

I recently had two daikin 3.5kw inverters installed in my own house.

Average cost fully installed back to back was $1900~$2100. At these stores who also did other brands like mitsubishi, fujitsu, panasonic. Difference in price at these stores were $300-$500.

The place I went to charged me $1500. The difference between panasonic ($100) and fujitsu ($150).
 
Another question is, can you install an A/C? As you will probably need to go through body corp for approval.

This could be why the other places don't have it.

If you can get A/C though it is definitely the way to go IMHO.

As for others not having an A/C (im not referring to this block, but rather the other units in the street), i would say its a combination of investors not wanting to spend the extra and owner occupiers who are of the older demographic and do not wish to spend the extra.
 
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