How to add value to your investment property

Like any investment, you want it to reach its absolute potential in order to maximise capital gain.

Whether you are reselling the property or turning it into a rental, here are a few tips that will increase the value of your investment property.

1. Buy in a good suburb

This is something to consider before buying an investment property. Buying in a sought-after location that has good rental returns will set your investment property up for success.

Proximity to amenities like shops, cafes, public transport and schools is likely to play a factor in the value of your property.

Also make sure to do your research on what developments are happening in a suburb. While these aspects may not be there yet, they could make a difference in the long run once they are built.

2. Choose your target market

Before you begin any renovations or upgrades to your property, think about who you are targeting.

If you’re investment is a one-bedroom apartment close to the Perth CBD then you’d most likely be looking for a single working professional, a university student or young couple with no children.

If your property is a four-bedroom with a big backyard close to parks or the beach, then you might want to focus on attracting families with children and pets.

Once you identify who your property would be right for, then you can base any renovations or designs to ensure they would appeal to this type of buyer or tenant.

3. Property developments

If your property can be sub-divided, then you could make a huge profit, but it will require time and patience.

If you were looking at investing a bit more into the property without sub-dividing, making extensions can be that additional leverage your property needs to take it to the next level.

Maybe the property is a big four-bedroom home, but the fact that its only one bathroom is turning potential tenants and buyers off.

Adding a pool, top story or rooftop space can also be examples of extensions that will add value to your property.

Before you make any developments, make sure you know all the Council rules for your local area and get the tick of approval.

4. Renovations

If you want to add value to your investment property, the most common way to do this is through renovating.

Whether it’s upgrading your bathroom or adding in a kitchen island, renovations can go a long way if done properly and with due diligence.

If you can flip an old run-down block that’s on a prime piece of land you will be able to sell or rent it out for much more.

Renovating things like fixtures, floors and walls are a quick and effective way in enhancing the appearance of the property.

Make sure to renovate the areas that people look for the most when inspecting a property; bathrooms, kitchens, outdoor area etc.

5. Keep it well-maintained

Looking after your investment property will increase its longevity. You should take care of your investment if you want potential buyers or renters to take care of it.

A prospective buyer is less likely to purchase a property at a good price that has not been maintained, likewise a tenant will not want a landlord who doesn’t follow through with maintenance requests.

6. Focus on the property’s best aspects

Consider the property’s advantage points and use this to maximise its worth.

Spend more money on amplifying the areas that really draw attention, so you know it’s at its full potential.

For example, if your outdoor area has the perfect set up for entertainment, then make sure you spend money enhancing the garden and surrounding features, so it’s not half done.

7. Don’t over capitilise

One of the biggest mistakes people make is assuming all renovations will add value to their property.

In other words, make sure you don’t spend more on the property than what you could potentially make off it.

The easiest way to avoid this mistake is by talking to a RE/MAX Extreme agent who will be able to tell you what your property is worth, what your potential rental returns could be and how it will compare to similar properties in the area.

It’s also worth talking to a financial advisor to come up with a budget for renovations so you don’t overspend.

Looking for an investment property? See what’s for sale on our website.

SOURCE: www.reiwa.com.au