New kitchen or leave it very basic?

[Jaz]

Hi All,

Our 2 Bed apartment (IP) in Sydney's Inner West has a very basic kitchen. The temptation is to rip it out and put in an Ikea/flatpack kitchen to make it a bit more appealing before we look for the first tenants. Having said that, is it worth the effort?

I don't really have the time to get stuck into it at the moment due to significant work commitments (and I'm not particularly handy, so this isn't something I'd be able to do in my sleep). I suppose it's a question of either making time (or not sleeping) and doing it now, before we get the first tenants in or leaving it to do later on, when we may or may not be able to afford it.

I'll ask the local property managers and perhaps the agent that sold us the flat.

Are there hard and fast rules or is it really a case-by-case thing, depending on the costs, potential increase in rent etc.

Any thoughts or opinions?

Cheers,

Jaz

 

[Lil Skater]

I think it really comes down to the particular property and area the property is in.

You won't necessarily always increase the value of your IP enough to warrant the work. Out here, there's only so much people will pay for certain properties, like 2 bedroom units and if you're going to do all that work, you don't want to only achieve $10 a week more.

Speak to the local agents and see what their feedback is.

 

[Ruff investment]

I think the reasons for doing it might vary a bit.

What is your depreciation schedule like, have you had the property for a while and could do with a boost in depreciation in the 2013/14 tax year?

Is the property vacant now & therefore accessible? A new kitchen may help get the right kind of tenant quickly. It also helps if the property is vacant because you can set the bar for the rent after the reno.

How run down is it? Is it likely that the tenants will be looking for better before long? It might also be worth doing a tart up rather than a full rip out and fix. As this is classed as repairs and maintenance (from memory) this means you get to claim them in the one year.

My goal is to attract long term tenants that look after the property.

If you are not handy with renovating, maybe see if an Ikea kitchen would suit. You can get them to rip out the old and install the new for a price. Might be worth while.

 

[travelbug]

If it won't make much difference to the rent I'd leave it for now and do it later.

Kitchens aren't nearly as expensive as people think but in the end- why spend money unnecessarily. If you do it now it's getting older and may need replacing again when you sell.

Photos will help.

 

[Jaz]

I think the reasons for doing it might vary a bit.

What is your depreciation schedule like, have you had the property for a while and could do with a boost in depreciation in the 2013/14 tax year?

The property is newly purchased so this will be the first tenants. It has new blinds and carpet in bedrooms, new paint job inside but otherwise is pretty basic. Schedule not done yet though.

Is the property vacant now & therefore accessible? A new kitchen may help get the right kind of tenant quickly. It also helps if the property is vacant because you can set the bar for the rent after the reno.

The property will be vacant when we get our hands on it.

How run down is it? Is it likely that the tenants will be looking for better before long? It might also be worth doing a tart up rather than a full rip out and fix. As this is classed as repairs and maintenance (from memory) this means you get to claim them in the one year.

The flat itself is fairly neat, but the kitchen would probably be the reason why a tenant would choose something else. Not a great deal of bench space at the moment. A freestanding island-type bench might help without the extra work.

My goal is to attract long term tenants that look after the property.

Me too.

Cheers,

Jaz

 

[heroine]

This will sound sexist but I'd say leave it and rent to a bloke

 

[SeafordSunshine]

Tax

I am not the one to confirm this, I am no where near a tax expert.. But I think if you leave it for a little while, and then replace the kitchen you may be able to claim it ...

Perhaps one of our Tax experts Somersoftians would be able to comment?
Good luck with renting your flat

SeafordSunshine
I hope this helps

 

[neeko]

you should be able to claim it as a tax write off for sure.