New Kitchen or NOT?

[Melbournee]

First IP - Old House. really old kitchen (cant replace handles/doors etc). Dirty walls - need paint.

If we rent right away (after a coat of paint) we get 1200 pm.

If we upgrade the kitchen ($5000-8000) we get 1320-1350 pm.

Which way should I go?

 

[depreciator]

So you spend possibly $8,000 on a kitchen and only get you an extra $1,500 per year in rent?

Pretty clear choice I reckon.

Don't forget to factor into the equation the fact that a clean and paint will take a weekend. A new kitchen could take a few weeks, so you'll be missing out on a few weeks rent, too.

 

[nww]

You can pick up cheap kitchens off ebay or in your local rag.
Installed a tassie oak which came with new stainless double over for
$500 last time I had to replace one (ebay is my friend)

 

[Sez]

I have to agree with the looking for a cheaper option! Renting out a house with an older kitchen can be harder, depending on the area you are leasing your property in.

Eventually all kitchens need to be replaced so weigh up if you want to do it now or maybe next time a tenant vacates.

As a PM I also see a big difference in the kind of person who is attracted to the newer updated houses and the older houses which haven't been updated - you will be attracting a different quality of tenant with the new kitchen too.

 

[DaveM]

Agree with ebay, there are plenty of good kitchens there you can pickup with appliances for under a grand. Makes the ROI much better.

 

[Jamie M]

If you have a go at doing some of the work yourself, you should be able to put a new kitchen in for a fair bit less than $8k. There are some online flatpack kitchen companies that ship Australia wide - do a google search and see what you find.

It might only get you an extra $1500 per year rent but it should hopefully increase the value of the property as well.

Cheers

Jamie

 

[cails]

Depends quite how bad it is and how it affects the rental potential...i.e. would it put off potential tenants?

I have an older style kitchen in one of my properties but it is not adding up cost wise to replace just yet....I will wait until my dad visits

Plus I wouldn't advise (depending on the location/age) of your property to put in anything hi spec. Most tenants I seem to have encountered, treat the property with disrespect and so you could have a very "bashed" kitchen in a few years and of course no comeback.

Maybe the cheaper ebay option is a good stop gap as many have suggested.

Good Luck!

 

[SeafordSunshine]

Kitchen!

Congrats on the first IP!
'tax wise'
I am clearly not an expert, but I think if you put in a new kitchen as as soon as possible you cant write it off on tax?
It may be that you have to wait a while to replace it.
Check out some pro's and cons about both arguments.
I am sure some tax guru types on this forum will be able to help?
Cheers,
SeafordSunshine

 

[mattysavager]

Hi there.

Another thing to consider is not only the rental return, but the demand.

At the moment in QLD, rents are stable, heading downward in some cases, and vacancy times are increasing. If there are a few other houses in the area for rent next time it becomes available, every week your property is vacant is costing you a few hundred dollars. If your house is the only one with a new kitchen at the same price, it will rent more quickly and you will be grinning.

Also - the full cost of the kitchen may not be claimable on tax, but you can certainly claim depreciation like you would for a new vehicle.

Hope this helps.

 

[Melbournee]

thanks to all the responses. Quite a lot of good "outside the box" thinking- appreciate it!

Decided to go ahead with a new IKEA kitchen.

was just thinking $8K earlier - expecting the max spending - since the kitchen is old and will need some plumber and electrician changes.

Need a pluber since its old style tap coming from the wall instead of from the cabinet. Also the height of newer cabinets is more than the older styled ones so change in piping? Anyone know what a plumber charges for that sort of thing? (one is coming in Monday for a quote)

 

[Aaron_C]

The plumber I use is Joni 0414 670 262 he's quite good and pricing is good too.

 

[Melbournee]

thanks Aaron. Will give him a buzz