Expert Advice by Paul Wilson
I’ve been working with property investors for over a decade now, helping them to achieve their wealth creation goals. One of the highlights of my job is to guide them through the process of identifying opportunities within their portfolio, so they can leverage their existing assets and supercharge their profits.
More often than not, it takes just a couple of slight changes in order for a client to add value to their properties and thereby obtain higher rents.
For instance, if your investment property is located in a tropical climate that typically swelters during the summer, then achieving an extra $10 to $20 a week in rent could be as simple as adding a split-system air-conditioning unit to the living room.
The cost of installing the AC unit would be depreciable on your tax return, while the extra rent you’re receiving means it will pay for itself within around 24 months. After that point, you’re enjoying extra profits and your property has a new feature to brag about.
It could also mean the difference between a tenant selecting your property over another, ensuring your property is rented faster and reducing the time of length that your property is vacant between tenants.
On a grander scale, you could look at some pricier renovations that have the potential to seriously transform your property balance sheet.
I have recently used this exact strategy in one of my investment properties, after I identified that it was under-rented and had plenty of scope for improvement.
Originally, it was a two-bedroom, one-bathroom home. For only $20,000, I was able to transform it into a three-bedroom, two-bathroom property. The renovation took around five to six weeks to complete and we placed a new tenant in it right away.
The new property features meant I was in a position to increase the rent by $50 per week, and I added an extra $40,000 to the value of the property. I doubled my outlay of $20,000 immediately and I get the benefit of an extra $2,600 in rent for the remainder of the investment. As three bedroom properties are more sought after in this location, my choice of tenants has also significantly increased.
Renovating and restructuring a property’s layout to add value is just one of a dozen strategies myself and my clients are using to transform our property assets into positive cash-flow investments.
What opportunities might you be sitting on, in terms of immediate equity and higher rental income, within your own portfolio?
Paul Wilson is an Independent Property Investing Expert and the founder of We Find Houses, Educating Property Investors & We Find Finance. Paul has been educating and coaching investors since 2001. Paul provides valuable, independent guidance and support by teaching strategies on how you can invest successfully while protecting yourself from commission hungry sales agents and property spruikers. Protect yourself with knowledge, contact Paul today for a complimentary consultation on 1800 600 890 or email firstname.lastname@example.org
To read more Expert Advice articles by Paul, click here
Disclaimer: while due care is taken, the viewpoints expressed by contributors do not necessarily reflect the opinions of Your Investment Property.