Renovating Your Investment Property

How would you like to achieve a 10%-plus net return on a real estate investment?

Many investment properties are under-performing simply because they are in need of improvement. Most owners know this, but are fazed by the work or cost involved.

Usually, we find that the very best investment return that Landlords can achieve is by improving their rundown property. This results in a significantly higher rental, being easier to rent, attracting a quality tenant, plus delivering a more saleable commodity as well.

Improvements & Renovation Justification

Currently, net rental returns are typically in the 1.8% to 3.0% range. A wisely spent $10,000 improvement can justify a $20.00 per week increase in rent. Therefore, the net return on this investment is 10%. A renovation, say $50,000 for a new kitchen and bathroom in a tired two-bedroom unit, can comfortably deliver more than a $100.00 per week rise in the rental amount, again in excess of 10%.

Additionally, there are tax benefits from depreciating the new materials, plus scrapping the old. If finding the funds is an issue, then you can now borrow at the lowest interest rates ever in Australia plus, of course, the interest is tax deductible.

Marriott Lane have formed relationships with contractors who can undertake cost-effective and timely renovations of kitchens and bathrooms, as well as the simpler jobs that result in a higher net return to the investor.

Improvements also increase the capital value of the property forever. Good Agents will report on the opportunity for improvements to your investment property in order to maximize the ongoing and capital return. Call us now for a cost free assessment.

Remember: The hardest properties to rent are the ones that are ‘rundown’.

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