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The decision around the path forward can also be about what suits your strengths. I guess the underpinning goal with why we started this way was that we wanted to create equity so we could buy again and also help have the property be holdable and in our case, make cashflow. So it depends what your circumstances are in choosing the way that appeals. All the best.
Mandar, our approach has been working with houses that need renovating (not necessarily structural), perhaps a house with wasted space or under-utilised space or an inefficient layout. This can be an opportunity for adding extra usable rooms. We have one property that had 2 bedrooms when we purchased it, it now has 5 bedrooms with two bedrooms having ensuites. The addition of ensuites was done in a second round of refreshing work we did after some years. The initial reno was the addition of rooms, taking out a wall, painting, new kitchen. We have used this strategy in a couple of properties.
With one property where we converted a 2brm house to 5 bedrooms 2 bathrooms, we also built a 2brm 2bath flat underneath.
We added a secondary dwelling to a property.
We do furnished room rentals for some of the properties, not all. There has been an obvious recent change in the student market with covid but our tenants have largely stayed as they are not all students, though we have experienced some time with a vacancy or two where normally we would be fully rented all the time. Overall very happy with how we have travelled through the last few months.
This approach suits us, though it’s not going to be right for everyone to do.
Hi Mandar
Just want to add that buying in remote areas aren’t the only way to generate positive cashflow property. We have properties in city areas that are positive cashflow. We buy well for the area sometimes well below market depending on the vendor circumstances, and it’s a property that can have value added, in ways that will add value to the rental price. This helps the property be cashflow positive from the start.
