How To Renovate For Profit

How To Renovate For Profit
Tip 1: Focus On The Right Areas While you might love the idea of a basement wine cellar, not everyone will. So, focus on the main areas of the home that are going to add value. Traditionally these are the kitchen, bathrooms, living spaces and outdoor areas. These are the spaces that people spend the most time in, while at home. They are also the spaces that catch people’s eye when they are finished well… or turn them away if they are rundown! Dedicate your budget to key areas of the home that are going to show you a good return. Tip 2: Have a Budget… And Stick To It It can be very easy to get carried away when you are renovating. Reign yourself in by setting a realistic budget for the project. Plan out what you want to achieve and how much it is going to cost you to complete each aspect. Remember that it is all well and good to have a budget. But, you then need to stick to that budget to make it effective! Think practically about each purchasing decision you make to ensure you don’t overcapitalise and can make a good return on your investment. Tip 3: Shop Wisely Hand-cut antique stone might be an attractive feature, but it is going to cost you more than you can ever expect to get back. Whereas tiles, laminate flooring, glass splashbacks or good old carpet are much more budget-friendly. You don’t need to be overly frugal and buy the cheapest option for everything as you still need to consider quality. But, make wise choices that...

How to raise the rent by 10%

How to raise the rent by 10%
This article is curtesy of NZ Property Investor Magazine. RENOVATIONS SHOULD ADD VALUE.  The reality is if you’re running your property investments as a business, renovations need to bring in a higher weekly rent, or money isn’t being well spent. Well-chosen renovations can add 10 per cent or more to the weekly rent.  Others, however, cost an arm and a leg but only add value on paper, not the rent itself. In order to raise the rent, a renovation must deliver tangible value to your tenant – no surprises then that almost every expert we spoke to said the top renovation is adding bedrooms. A three-bedroom property, for example, will rent for more than a two-bedroom, even if the footprint is the identical size. That’s because renters either want to put more people in the house or would like to use the extra bedroom as a study or media room. THE EXTRA BEDROOM Depending on location an extra bedroom can add $100 to $150 a week, which on a $400 or $500 a week rental is a significant improvement to the yield. The cost of an extra bedroom can range quite literally from $2,000 for a simple dividing wall to a $200,000 extension on a difficult site. Consequently, investors really need to do their homework before buying. Mark Trafford, director of Maintain To Profit says the cheapest way to add an extra bedroom is to choose a property where part of the living area can be walled off to become another bedroom. A simple dividing wall and door costs from $2,000 Trafford says. “If you are adding a dividing...

New laws around property investment deposits

New laws around property investment deposits
West Auckland Property Management (WAPM) has curiously watched ANZ, ASB, BNZ, Westpac and Kiwkbank hit the fast forward button. According to Scoop.co.nz, all five of the country’s leading retail banks have acted early to introduce restrictions on lending to property investors as part of the Reserve Bank’s bid to slow the heated housing market. Last month, the central bank said it intended to have the new lending restrictions that required property investors to have at least a 40% deposit for loans in force by Sept. 1, asking lenders to comply with the spirit of the new regulations immediately. What are the new regulations to be enforced on September 1? Investors: • Restrictions for investor lending extended from nationwide from Auckland only • Banks will be forced to require a 40 per cent deposit – up from 30% – for at least 95% of the loans they make in this area. Home buyers: • Restrictions for owner-occupier lending extended from Auckland to nationwide. • Required deposit level remains at 20% for at least 90% of bank lending. ASB said existing approvals and pre-approvals above the new 60% loan to value ratio would be honoured until their documented expiry date, while BNZ said “all investor home lending applications from today will require a 40% deposit.” ANZ, the country’s biggest lender, said it would extend the maximum loan to value ratio of 60% for property investors across New Zealand. The bank had previously only required a 30% deposit in Auckland. The bank said it intends to honour all existing pre-approvals, but any renewals will be subject to the new policy. How does...

Safe As Houses

Safe As Houses
Security and Safety is as important to tenants as it is to you in your own home.  While the initial costs and ongoing maintenance of a full-blown burglar alarm system won’t make it a suitable option for all rental properties, there are many easy steps you can take to provide a safe and secure home for your tenants. Outdoor sensor lights, safety catches on windows, door locks, safety stickers on glass, smoke alarms, handrails and chimney sweeps don’t cost a lot to do but will improve everyday life.  Tenants will rent properties they feel safe in and will probably pay a little bit more as well as stay longer. LATCH ON TO THE BASICS. Many aspects of security and safety are common sense, says Mark Trafford, of Maintain To Profit.  But unfortunately he often sees landlords overlooking the basics like fixing window latches and door locks, especially in older houses. “It’s one of the biggest frustrations for tenants when landlords don’t fix door locks or window locks, tenants will even leave because of it.” Trafford says. “It’s about imagining that you and your family were living in the property, so if you do it in your own home then do it in your rentals.” For the property’s own health, it is especially important to make sure bathroom and laundry windows can be left opened safely for ventilation purposes. “Tenants don’t always open windows, so it’s important to having security stays.” Locks on garage doors are another important aspect for tenants as often they will be storing valuable equipment or sports gear in there. When installing a new door lock, opt...