The benefits of investing in a new property development are many, assuming you have the assurance of a credible developer. A new apartment shouldn’t require any major maintenance, refurbs or repairs for three to five years; you will most likely benefit from the latest in energy efficiencies and design trends; and state of the art security features are usually part of the development. In addition, homes in new developments will generally increase in value from date of sale as many developers start with very competitive pricing, and the locations are handpicked for their long-term sustainable tenant demand and growth potential.
However, as property is a long-term investment improving its value should be a long-term goal. The time will come when you will need to consider tweaks and look at ways of improving its value to ensure your portfolio grows over time. A higher property value means higher rent while providing the best possible returns when it comes time to sell.
Before making any changes, understand your target market. What appeals to them? If your investment property is close to a university and your key rental market is students, for example, a well-thought out study space would be noticed. If it’s a family neighbourhood with schools in close proximity, your space should sell the family lifestyle.
Here are some ways to increase the value:
1: If you have passed the five to 10 year mark since purchase, consider a new coat of paint and take a look at things like plumbing and electrics before they become an issue. Modern systems generally mean less maintenance, less hassle and lower costs.
2: Estate agents often speak about “curb appeal” – the outside or entry is the first impression and is critical to attracting rental interest. If you have a verge in the front or a small garden out back opt for landscaping using low maintenance, durable solutions like succulents and perennial plants or gravel gardens.
3: Energy-efficient upgrades not only help save you money on your utility bills, but the increased consumer demand for energy efficient homes means another attractive selling point in your favour. Energy efficiency comes in the form of low-flow shower heads, solar panels, timed switches, insulation, a smart thermostat, LED lighting, etc. These consumers are also likely to appreciate health-focused facilities such as an air purifier or water filtration system.
4: If the home needs it and you have the budget, consider upgrading the kitchen or bathroom. They’re the areas that tend to date fastest and are usually the upgrades that increase marketability. You don’t always have to gut the room – switching out a sink or bathtub, changing countertops, updating lighting fixtures, buying new appliances or expanding from a half-bath to a full can have the same effect. The key is to spend money only on fittings and improvements that enhance the property and provide returns.
5: If brick and mortar renovations are not required or not an option, new features can make a big difference. From aesthetic fixes like new door handles, funky lights, high-demand finishes, new carpets, vinyl flooring or tiles, to adding extra appliances like a dishwasher or air-con, extra storage space, or a shaded deck, may justify higher rent. Take a look at in-demand properties in the area and see what they offer and the rental difference.
6: Are you able to make the space more functional by taking down a wall? Can you add more square footage by converting a basement or additional garage into living space? Before you renovate, do some research on your area to find out where the demand lies and how much the property will be worth after the renovations.
A lot of the value lies in being a good landlord and routine maintenance. Address repairs promptly. If your property is offshore, employ a reputable agency that will conduct regular inspections and do the necessary jobs. And make sure you do reference checks on your potential tenant… the right tenant is more likely to look after the property as if it were their own.