Increasing Rental Yield - Air Conditioning

Alex P Keaton

Alex P Keaton

Hi

Just wanted to get your opinion and advice! :)

I'm wondering if it is worth it to put air con in to my unit. I'm in two minds whether to do it or not. I bought it in December 2009. It costs me around $1-2 pa to hold this property. I currently get $220 per week in rent. Strata put in a whole new switchboard recently which is good.

Its a 1 bed unit 41 sqm, communal laundry, nice renovated kitchen and lounge.

I was trying to find other threads here to do with this but couldn't.

I was planning to up the rent to $230 per week in January but if I put air con in i'm wondering what shall i put the rent up to... To $240 per week? or perhaps to $250 per week. Is asking an extra $10 a week on top of the usual annual increase of $10 per week the right amount.

I'm thinking I'll need 15 amps power. I'd have to get someone out to give me a quote.

In the complex there is only one other unit with reverse cycle air con but that is an owner occupier. There is a box air con in another rental. I dont think many units in the area have air cons. I can see it would highly desired.

I'm wondering if I will do it for this summer.

When I talk to my PM do I make it clear that in the tenancy agreement the tenant has the choice of either a $10 increase and no air con or they pay $20increase in rent for the use of air con.

Any advice welcome

thanks
 
Alex P Keaton said:
Its a 1 bed unit 41 sqm
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My experience tells me people who rent these are not the wealthiest in the world.

It also tells me, they are highly mobile, and with their Dad, their two brothers and their boyfriend, along with a trailer, they can up stumps and have their entire worldly possessions moved out within a few hours.

These renters are highly highly mobile and not afraid to shift. I've seen $ 5 pw be enough to push them over the edge and have them gone.

Let's hope for Kim's sake, that the renters have also read the article where it states they are happy to pay 20-30 pw extra for A/C. I'd suggest most haven't.

They are more of the mindset of "we pay over the top rent, now what is the Landlord going to do for us....and they better not even think about charging us extra, or we're outta here"
 
Kim, I would not even be mentioning A/C to them if they have not requested it.

As Dazz said, ppl who rent 1brm units are not the biggest payers of rent. If you mention A/C that might start off a whole range of ambit claims for stuff their (obviously) wealthy LL should be putting in for them.....at no cost.....just to keep them on, especially since they look after the place so well :rolleyes:
 
It's only a small unit. Tell them to buy one of those units from Bunnings for $100.

Tenants in my property (3 bed house) wanted air con so i got a quote and it was going to cost me about 2k. I told the pm that i will install it but put the rent up by $20. The tenants lost their $hit over the fact i would dare up the rent just for installing air con and said if i upped the rent they would leave! So i said bugger it and didn't install it, then upped the rent $20 more 3 months later in line with market rent. 2 years later and their still there paying even more rent and still no air con. :D
 
mary&mat said:
Hi Kim,

I read in an old API issue it adds approx $20-$30 a week if you install an air-con.

Cheers,
M&M
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Maybe in a four bedroom house in a blue chip suburb, where the increase in rent may be ammortised by the number of residents enjoying the device. ;)

I am also of the opinion that spending circa $1500 on a/c that may glean another five bucks per week may cut into your guest's schooner money. :cool:

Then factor in vacancy and re-let fees. If they haven't asked for such, there is no need to provide.
 
mary&mat said:
Hi Kim,

I read in an old API issue it adds approx $20-$30 a week if you install an air-con.

Cheers,
M&M
Click to expand...

I think you will find that is dependant on location and quality of property.

Before spending a lot of money on something like air-con, why not have a chat with your PM. They are in the best position to know if it would be worthwhile or not. FWIW, I have several with no air-con and they don't get a whole lot less than the ones that do (in a similar standard home, that is).
 
skater said:
I think you will find that is dependant on location and quality of property.

Before spending a lot of money on something like air-con, why not have a chat with your PM. They are in the best position to know if it would be worthwhile or not. FWIW, I have several with no air-con and they don't get a whole lot less than the ones that do (in a similar standard home, that is).
Click to expand...

I'd say milk the PM for any info regarding other units having aircons's or not, but I poersonally would be srurpised if the PM would necessarily know based on my epxerience
 
Also the location matters...up here in Ingham, air con is a MUST, it will fetch a heap more dollars, I'd say in the vicinity of around 30-40 per week, if it's done properly and works properly.
 
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So it depends on how well Kim knows the proerty

The PM's that have managed my properties knew how to do research on the net etc to guesstimate average rents and woudl talk it up when presenting their ideas to me to make it sound like they knew the complex better than they actually did, but they were just guessing and making it sound like they knew.

I suppose if a PM actually manges multiple properties in a complex they would know, but I don't actually see that happening too much in Perth, it's random PM's manging individual units where I've looked (in the cheap end of the markeet in simlar areas to Kim). So you just get average PM knowledge a lot of the time, rather than specific knowledge relating to your property / complex...

My new t/house IP has 2 airscons, 1 downstiars int eh loungs & 1 in the bedroom.. The air con in the lounge is a good idea, I should do that in my one for my own comfort (I live the complex as well), but I dont think I'd have paid to put the 2nd one in this investment one I bought if it wasn't already there (ditto with the rollershutters)
 
I have a feeling Ms Keaton there missed a 'K' somewhere :D

My old house has a reverse cycle aircon (free) and a wood heater ($2000) and the tenants absolutely love them but the house is already getting the maximum rent possible in the area so without them I'd get no less rent.

This house has two window air conditioners, one reverse cycle ($800) and one cooling only ($500) and they make this house soooo nice and comfy I think I'd be having a dummy spit if I was renting this house with no heating. It won't be a rental until our new house - which has no air conditioning but is 6 star rated - arrives.

I didn't have to pay any extra to get the aircons installed, both houses were already wired up so the circuits could handle them just fine. FIL is an electrician ;)
 
Mark Laszczuk said:
Geez you country bumpkins over in the West are slow, aye. Do you see what I did there?
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WTF are you talking about ?


Rumpled Elf, Kim's talking about a 1 bedroom flat (sorry, we call them apartments now that Perth is becoming trendy).

Like Dazz suggested, they don't command much rent so therefore the %age of extra rent the aircon MIGHT attract would also not be much

If Kim's dad isn't an electrician it will cost her for fitting aswell obviously,, as she hasn't mentioned any freebeies, safer to assume she'd be paying for it I'd think....

Certainly will not hurt, and obviously will be more comfortable than without, but not sure if it will add value or not, either retnal income or resale vlue
 
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