Investing in Units

From: Michael G

Hi Peoples,

I was wondering if I could open a discussion on the problems/solutions of investing in units.

I live in Sydney and am looking West.

From a cashflow perspective they are pretty close to neutrally geared, if not positively geared, if you take tax concessions into account.

I've had a look at a few units and some were well keep, others not so.

The places I looked at were ranged in age from 10-30years old.

My thoughts were turning towards what can be done to improve a unit, in regards to boosted value?

Because as I understand it, you cannot change the outside appearance, due to body corporate control, so that leaves a units interior.

So the options are...

- walls
- floors
- kitchen
- bathroom
- built-ins in bedrooms.

Walls: what options do we have?
- fill any holes and new coat of paint

- new carpet
- pull up carpet, polish floorboards (if exist)
- remove carpet, lay down floorboards

Something that was done to a unit of mine was overlay the vinyl kitchen floor with titles, we just grouted over the top and laided the tiles, it actually looks quite good.

- paint cupboards?
- change "handles" and tap fittings to modernise the look?
- what other low cost modifications can be made, before replacing the whole kitchen?

- change the vanity unit? (would this be the cheapest modification that can be done?
- change the tap fittings to modernise it
- change the glass of the shower-recess, maybe, give it a more modern look.
- bath, I've heard these can be reglazed to make it look like new?

Any renovators here?, I wonder with your experience what the cost of some (or all) of these changes would cost?

Please, if you have an idea or experienced please contribute. I'm sure all would benefit.

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Reply: 1
From: Owen .

I've thought a lot about this too and what you have listed is about all you can do. These changes can be cheap and make a huge difference to the atmosphere in the apartment especially in older building. Just don't over capitalise. You don't need an amazing apartment in a crappy building, just the best one.

I have a 1br rental in Neutral Bay in an old Art Deco block which is a bit tatty. Nice and secure and tidy, it's just when you walk into the foyer and down the hall it looks a bit dim and comes across as musty.

Open the front door of my apartment and you are met with polished floor boards (on top of concrete), pale yellow lounge room (ceiling too), pale blue bedroom with lots of sunshine and rattan roller blinds and a good kitchen with solid timber top. Like that when I bought it and never had a problem renting it.

Next tenant change over (or before) I will be doing the bathroom as you described. Re glazing bath, re tiling walls and floors, new vanity and probably loo. I'm also going for new kitchen cupboard doors and handles, new light fittings, switch and plug plates and a full repaint.

Should cost about $8k all up, will add about $25-$30 pw to the rent and $20k-$$25k to the value. I've checked out other apartments in the area and done comparison checks. Will be well worth it and easy to do.

Basically think about Geoff1's "cosmetic renovation" ideas applied to apartments. There are heaps of good value apartments out there. I saw an Art Deco 1br with sunroom 6 months ago in Dulwich Hill with pink paint, pale pink bathroom and shagpile carpet. It was solid as a rock with that lovely Art Deco scale to it. It had floorboards under the carpet, re glaze the bathroom, put in brushed stainless kitchen cupboard handles, new door handles, change light switches and fittings, repaint, concentrate on the details and you have a winner. It was for sale for $139k!!! Kicking myself I didn't buy it. Would have rented for $210pw.
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