Renovate or Not

Discussion in 'Adding Value' started by mozzart, 15th May, 2015.

  1. mozzart

    mozzart Member

    Joined:
    15th May, 2015
    Messages:
    1
    Location:
    Sydney, NSW
    Hello Everyone

    I'm new to this forum. I've been investing for around 4 years.

    I wanted to know your personal opinion on this.

    We own a 2 story-semi on a nice location.
    Near the beach and amenities in Sydney.
    Property is rented. Rental return is around 4.5%. Its 100% investment.
    Semi sits on a 300m2 land. Got garden. Not too bad for its location.
    Currently some ocean glimpses from kitchen and living windows.
    No terrace.

    Would you renovate this semi:

    - Go up, add a 3rd level (level up will have ocean views)
    - Add a terrace or two terraces with views

    Investment would be around $300k+, I could increase rent by another $500-$600 a week. I think value would increase more than $300k.
    But no rent for 4 months.

    Or, leave it as it is and find a new property with those $300k deposit.

    Question is, is it smart to renovate investment properties?

    Thanks a lot in advance
     
  2. Propertunity

    Propertunity Real Estate Buyers Agent

    Joined:
    1st Jul, 2008
    Messages:
    9,698
    Media:
    1
    Location:
    NSW Central Coast, Sydney, Newcastle and Lower Hunter
    That's a good deal :)

    It would have to go up by $600K (rule of $1 reno spend for $2 min. value increase) or not worth doing IMO.

    Work out the numbers and see if they justify the loss of rent and the loss of deductions for the reno period, as the property is not available for rent.