IP value basics

[Hadouken]

Hi everyone!
New to the forum, and so glad I found it.
So many knowledgeable and helpful people on here.

Question: I have owned my investment property for 2 years.
4bd 2car 2 bath 700sq block built 2008 good solid house.

For additions and tenant happiness what would you do( in order)
1) garden is rough/overgrown tidy it?
2) insulation
3) ceiling fans( it has aircon in lounge only)
4) outdoor area(with roof) to entertain( they currently sit outside on the grass in the sun)

In order to sneak the rent up a tad, what would be the thing to do, also wouldnt mind adding capital either!

 

[jward101]

Welcome. I'm relatively new so grab a handful of salt rather than just a grain.

Is there any reason why you would do nothing and increase you rent inline the general cost of living increases?

Is a capital improvement your way of appeasing them? Just curious moreso than making any judgement either way.

Those questions aside, from a logical point of view I expect visual improvements might yield a better tenant response over the hidden improvements. Its just a matter of how much you want to spend and how much you'd then want to increase their rent on the basis of those improvements. Remember to update your depreciation schedule.

 

[Propertunity]

1) garden is rough/overgrown tidy it?

Tenants expect that anyway - but don't want to do it themselves or pay for it

2) insulation

Unseen - $0 value add

3) ceiling fans( it has aircon in lounge only)

$0 value add

4) outdoor area(with roof) to entertain( they currently sit outside on the grass in the sun)

Nice to have but not a huge value add - but the only thing that could add value out of the 4 options listed.

 

[Jess Peletier]

In terms of tenant comfort, ceiling fans can be a big one depending where you live.

In a hot climate, they can be a lifesaver.

I would have a chat to your tenants - they'll be the best ones to let you know what could make the house more livable.

In terms of capital value-add, an outdoor entertaining area/patio is always nice and I think it could add a decent amount of value to the home. It'd make the home more desirable to tenants too.

 

[Hadouken]

Thank you for the above replies, and pretty much what I expected.
The garden was a little bit of tenant, and myself, as with everything I have I want it to be neat(dont want to be the gardener either)
I thought it was a little odd that the house didnt have insulation installed, but, once in, its in forever.
Living in Queensland, yea, fans for tenant comfort thats a big one.

The tenants have been there for 4 years, so any improvements in cooling/upgrades they would for sure appreciate.

And lastly, the outdoor area will definately be installed.

Id like to have a package of highly desirable IP's, late model, low maintenance, cool, efficient, good entertainers with big blocks.
So come new tenant time, mine will be at the top of the list everytime.

Robert

 

[Scott No Mates]

welcome& congrats on realising that a property does need maintenance to grow your income and asset base.

The tenants have been in for 4 yrs, time to start thinking about when the next repaint is due (3-5 yrs or sooner).

I would seriously consider the ceiling fans in the bedrooms and insulation for starters as these are minor inconveniences while they're done.

Gardens can wait until it stops growing in autumn and the painting assessed closer to move out of the tenants.

 

[rizzle]

Which of the following would deliver the best capital gain ROI on my 1960's 2/1/1 PPOR unit in Moonee Ponds:

• Split system A/C for kitchen/living area ($2.5k?) - no current heating or cooling system in place for living/kitchen area (ceiling fan going in soon for personal comfort)
• Laminate flooring for kitchen/living area (Low $2,000's) - living has ugly old green carpet, kitchen has old and unappealing pine floorboards (so new flooring likely to have large visual impact)
• New bathroom (Guesstimate of between $4k and $6k) - current bathroom is original (ugly), with pink tiles and ratty old shower screen

Hadouken apologies for the hijack. I think all of the above are worthwhile, but just curious to hear others thoughts.

 

[Hadouken]

Hadouken apologies for the hijack. I think all of the above are worthwhile, but just curious to hear others thoughts.

I started waving my fist until I saw this haha^

4-6K for a bathroom? I dont know where you get your bathroom quotes from but mine was cheap and it was 9k

 

[travelbug]

I started waving my fist until I saw this haha^

4-6K for a bathroom? I dont know where you get your bathroom quotes from but mine was cheap and it was 9k

Yeah $4-6K is doable. Especially if you rip stuff out yourself and don't move plumbing.

Rizzle why didn't you start your own thread?

Things that have visual impact have the better ROI.
Bathroom- definitely.
Floor shouldn't cost $2K if you are using cheap laminate. Update the kitchen too. Paint cupboards and replace handles makes a world of difference to an old kitchen.