This thread is for anyone to post about experience they may have had in raising the value of an investment property in order to free up equity.
I’m very interested in hearing some new ways to increase the rental income.
I’ll start: Example
> 50k property
> $110 pw rental income
> Improvement- We installed metal railings throughout the backyard and around all the rose gardens as our tennant was having trouble with his knees and back. The railings allowed him to keep gardening and getting throughout the whole backyard with ease.
> Cost- $750 for all work
> Rental Increase $10 up to $120.That sounds really tenant specific. I cant really see how a new tenant will appreciate that nor add value to the property.
Good point, the example is very tennant oriented as it is a long term lease agreement, the rental increase does allow for movement in borrowing capcity however.
so is that really increasing the property value, or just enhancing your borrowing power ??
By increasing the property value, you increase your borrowing power.
Instead of resting on my example, lets throw around a couple of better ones. that was the idea of the thread, not to get caught up on one example.[^]Not only that, but it’s easier to keep a customer than get a new customer according to the marketing guru’s..
So- it’s good to look after your tenants especially long term ones..[^]
REDWING
“Money is a currency, like electricity and it requires momentum to make it Effective”
The quickest way to increase the value is to get hold of Henry Kaye and ask him if you can use one of the crooked valuers he used to bribe to give inflated valuations. They are all looking for some work now.
Once you have the puffed-up valuation, just go to one of the shonky lenders and they’ll help you borrow some extra money to buy another property.
And then, when the whole lot comes a-crashin down, stand back. Or, find someone who doesn’t know the tricks, such as a young family looking to buy a home of their own and WRAP ‘EM into it.
Just kiddin’ folks.
Bec
Redwing,
Interesting comment about keeping existing customers, or tenants. On the other hand though, I recently bought an IP with tenants with a few months left on their lease. Nice stable tenants whom I met. The rent was pretty cheap but I was happy with it… kind of… Then they say they´re moving out. So I get new tenants in at market rental and my place becomes almost pozz geared!
A few notes here… (1) Had my place been at market rental to begin with, I am sure I would have paid more for my property.
(2) I feel very uncomfortable about raising rents for existing tenants- it´s a hard thing for me to do- particularly to raise them by 25% to bring it up to the market rate.
(3) My new tenant has no qualms about paying this higher rate- it´s still bloody cheap compared to what I´m paying in sydney … sob…
The best thing that could have happened was my old tenant moving.
Still in Austria folks- and my euro keyboard is a bitch. Forgive me :Ö)
kay henry
Kay..
A good win then, guess it says something for keeping your rents around market levels for the area, the original owners must’ve had a ‘set ‘n’ forget’ policy..
I read somewhere that tenants on average move every 6 months, i haven’t found that to be the case though ?
Also read that Home owners move every 7 years.. hmm i’m moving too often by that guideline then..?
I ‘always’ look at the ‘for let’ section of the paper, as well as the ‘for sale’ section, for areas i’m interested in, to see average market rents..
PS- How’s the trip going ??
REDWING
“Money is a currency, like electricity and it requires momentum to make it Effective”
Cheers guys.[^] on the topic of re-valuations, many banks/lenders I’ve heard have an issue with re-valuating a property within six months of their last valuation.
What can you do to hurry this process up when in need of freeing up equity??[?]If you buy a book called “101 ways to increase…” by doos de roos.
As the title said there are 101 to increase your property!
Warm Regards
ChanDollars
[Keep going, you’re on your way to Frolic Freedom!]Originally posted by Alexander2:Cheers guys.[^] on the topic of re-valuations, many banks/lenders I’ve heard have an issue with re-valuating a property within six months of their last valuation.
What can you do to hurry this process up when in need of freeing up equity??[?]Hi Alexander2,
it will also depend, what type of relationship you, have with your lender… some lenders are happy to do re-evaluations quite frequently…. as long as you have no problems in paying for a re-evaluation everytime…
Just another thing of note…
this is something from my experience ive learnt…
lets say if you own roughly 11 properties, you will find, usually one property, is always vacant… not for long periods, but usually due to a rental leasing finishing up…
so in just rough words… for every 11 properties, do expect one of your IP, to be not tenanted…
eg… if you have 66 expect 6 not to be rented, same as if you were to have 555, good chance that 50 of them may be vacant or the tenants agreement is ending…
Cheers,
sisWe buy and then renovate our properties. The property is valued by the lender when the loan is approved, we renovate and have it revalued within about 4 weeks and use the equity gained to buy another one. The lenders we use have no problems in revaluing so soon.
We tend to do fairly comprehensive renos. We spend about $10,000 and do the whole place. Kitchen, bathrooms, floor coverings, paint etc.
For example we bought a unit for $237,000, spent $10,500 on it and had it revalued 3 weeks later for $290,000. The rent when we bought it was $260. After renovation it rented for $325.
Cheers,
Karen[
]Scully, wuold you look at getting another valuaton in such short time had you only done a minor amount of work on the property, ie Paint job and small restorations in order to raise property price. Obviously it will depend on the house itself whether you think it’s worth your time and money… what I’m getting at is how relevant do you think think the small things are which make a house look really appealing when it comnes to raising the valued price??
cheers SIS, I’ve followed a lot of your threads in the past few months, learning heaps… keep it up!![^]
Wouldn’t it be better, if you were doing extensive renovations, to get a valuation before you do the renovations, so there are no surprises.
James
Alexander2 – If we only did small improvements, it probably wouldn’t be worth getting re-valued so quickly as we are looking for enough to get a deposit on another one. Having said that, a paint job and general tidy up to a place in pretty poor condition can really up the value if it’s in the right area.
Georgisj – That is exactly what we do. Get a valuation before reno and after reno.
Cheers
Cheers Scully, lots of help….[^]
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