renovating – CPS Finance

Renovating vs. Improving: What’s worth it?

Shaun Ellis — Fri, 30 Jun 2017 00:17:33 +0000

As an investment property owner, it’s important to find the balance between maximising your property’s value and your cash flow. If you invest in the property through renovating you could potentially increase your equity, allowing you to reinvest or increase your rental capacity or capital growth. However, any money spent on your property will ultimately affect your cash flow. So, before you upgrade your investment property, understanding the difference between renovating and improving will be crucial in determining your cash flow over the next few years.

Renovating: a timely exercise

Renovating refers to the more complex changes that can be made to a property including changes to the floor plan, bathroom or kitchen remodels, or other structural changes.

Renovations require constant planning and execution, decision-making and solutions, and financing. There’s no denying that renovating is the most popular way to increase the value of your property, however it may not strategically be the right choice.

It’s important to be educated about the location of your property in terms of population, demand, rental yield and future and current infrastructure. These factors will all contribute to demand from tenants. When renovating, it can be easy to overcapitalise on your upgrades. If you then struggle to secure the right tenant at the right price, it can put pressure on your cash flow.

Doing your research and seeking advice from a real estate professional is paramount before undergoing any renovation exercise so you don’t overcapitalise.

Improving the right amount

The mindset of a homeowner versus an investor should be very different when it comes to upgrading your property. As an investor, removing any emotion is paramount to making financial decisions. Simple improvements can make a big difference to a rental property and can cost much less. These may include a fresh coat of paint, updated flooring – whether that be polished floorboards or new carpet – and new light fittings. Instead of renovating a whole new kitchen, simply change the cupboard doors. Similarly with the bathroom, instead of ripping everything down, try to upgrade the vanity, shower screen and fittings.

These smaller improvements can cost as little as $5,000 while adding as much as $10,000 to the property and increasing the rental amount by $50 a week.

These smaller adjustments to your property can add value to your property, attract quality tenants and won’t entice you to over invest for the location. To discuss your investment options, contact CPS Finance today.

Renovating vs. Improving: What’s worth it?

Shaun Ellis — Tue, 22 Nov 2016 23:45:57 +0000

Renovating: a timely exercise

Renovating refers to the more complex changes that can be made to a property including changes to the floor plan, bathroom or kitchen remodels, or other structural changes.

Doing your research and seeking advice from a real estate professional is paramount before undergoing any renovation exercise so you don’t overcapitalise.

Improving the right amount

These smaller improvements can cost as little as $5,000 while adding as much as $10,000 to the property and increasing the rental amount by $50 a week.

How to add value to an older property

Shaun Ellis — Tue, 18 Oct 2016 21:49:08 +0000

Even though Australian housing prices are on the rise, a seller can’t rest on their laurels and just hope for the best when it comes time to put their house on the property market.

Whether you want to increase your property’s value for resale now or in the future, there are plenty of ways you can add value to it, even if it’s a little on the older side.

Here are our top picks for adding value to an older property:

Create space

Often, older houses have narrow walkways and frames, and can appear quite cramped. People love a flowing, open plan space, so achieve this by removing a non-structural wall to open up a living room and kitchen space, or to combine two smaller bedrooms into a larger living area.

Let the light in

Things were different when older houses were built.Most older houses are darker due to smaller windows and less of them. Letting more light into a space not only warms up the atmosphere and mood, but also leads to a positive environmental impact by decreasing the need for lights on during the day.

You could make these changes by removing old windows and replacing them with larger ones, and also by installing skylights into the roof in particularly dark spots.

Landscape the outdoors

As we all know, the outside of a property provides the first impression of a property. Make it count by sprucing up the garden and lawn area of your property. Regular maintenance will mean it stays decent for longer, and will always look presentable. Achieve this by keeping lawns mowed, bushes pruned back and, where possible, try to have plants and flowers that are inviting and bright.

Repaint it

Painting can be of benefit to both the exterior and interior of the house. The interior will come alive with a fresh coat of off-white paint, and the exterior of the house could be repainted, or rendered to give a modern aesthetic. When updating your interior walls, you might want to consider updating your light switches as well. Swapping them out for fresh white, or even a metal finish, can give a fresh contemporary effect.

Look to the floor

Flooring in older properties can be quite outdated and off-putting to buyers. By spending a little on new, modern carpet, tiles or hardwood, you will reap the rewards with an instant impression.

Perform simple renovations

Making some small changes in the main areas such as the kitchen and bathroom can really add value to a property. Swapping frosted shower glass to clear, upgrading taps and the faucet, removing stains and mould, painting the cupboards and walls, and updating tiles and curtains can do wonders for these rooms, especially if you don’t have the ability to do a complete renovation.

Don’t risk it

It can be a good idea to look at fixing, changing, or removing any features of the house that are completely strange to our modern day. Things like wacky wallpaper, or a broken back deck, will automatically make people question the entire house. Try not to leave anything to chance, as you’re trying to appeal to a broad spectrum of people.

Subdivide

Having an older property can sometimes mean you are sitting on a nice big piece of land as well. An option to really add value to your overall land mass is to consider subdividing your block. It’s a more complex idea, but it can also be more lucrative, which would end up giving you more funds to give your current, older property a nice makeover.

Make it a home

People buy homes, not houses, so when you are showing your property for sale, make sure it presents in a warm and welcoming way. If you’re not confident with your own furniture and decor, rent furniture to help your potential buyers picture themselves living there.

To learn more about increasing your property’s value, contact CPS Finance today.