Turning 1 BR into 2 BR: Cost vs. Return

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Elysium
Participant
@elysium
Join Date: 2018
Post Count: 5
November 26, 2018 - 1:05 am
Hello,
I own Two 1 BR apartments in new buildings in Brisbane.
Rental return (after management fees, body corporate etc) is about 3.3%
Rental is 410 AUD weekly.
Question:
Converting them into 2 BR would be easy (use space from the outdoor terrasse) and I believe not very expensive (adding 1-3 walls).
Would this increase my rental income?
It would be a rather small 2 BR apartment, but I suppose there are people who can’t afford a real 2 BDRM, perhaps a young couple with a child, who would be willing to pay a bit more for an extra usable bedroom at the sacrifice of outdoor space?
https://ibb.co/30XyZ4T See Image for example
Thank you
- This topic was modified 5 years, 12 months ago by Elysium.
- This topic was modified 5 years, 12 months ago by Elysium.
- This topic was modified 5 years, 12 months ago by Elysium.
Jaxon
Participant
@jaxona
Join Date: 2014
Post Count: 284
November 28, 2018 - 2:47 pm
Ok, providing it complies with the body corp bylaws and your not altering any external space you can do this, the issue is it technically is not zoned, approved as a 2bedroom so for resale you should and can list as a 1bed or 1+
but I have heard of cases of people being compensated for buying a 3b that was legally a 2 bed and study.
in regards to rental return, that is fine, yes you would likely get a better rental return.
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Ricky Johnson
Participant
@fixedandsold
Join Date: 2019
Post Count: 9
February 4, 2019 - 4:59 am
Find some local agents in your market and ask. I can’t imagine that a 2bedroom would ever rent for more than the combined income on the 2 singles, especially if it is a very small. Your return is bloody awful if I am understanding it correct at 3.3% (is that annually) if so – that’s insane!! Can you get more rents doing airbBnB? If not, I’d sell them both before you market crashes and redeploy your funds into something earning 10%+ a year. You might be able to partner with some flippers on your side of the pond to boost your income. I do it with a group in the states and am seeing 10% to 20% annually. They’ve just announced that they are going to try to get us 30% on the higher end flips they are doing but I will believe it when I see it. They are still guaranteeing 20% on the flips and after a few years with them, I am comfortable. Finding good returns isn’t easy especially for the smaller investor but your unit there have to be expensive? How much do you have in them? Ricky
Ricky Johnson
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