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Tips for renovating a rental property
Renovating a rental property brings about unique challenges, however like most renovations the goal will be to improve the property and make a profit.
Before you start renovating it’s a good idea to consider what you hope to achieve from the renovation – are you looking to charge extra rent, do you want to attract a different rental demographic, or perhaps you’re hoping to lift the property’s value ready for sale?
Consider time and budget
When renovating a rental property you need to plan carefully and aim to carry out any work in as short a timeframe as possible.
Most investors choose to renovate in between tenancies, meaning that every week the property is being renovated is a week without rental income.
Budget is another important consideration. To avoid overcapitalisation it is a good idea to research the local property market to get an idea of property values in the area and the price difference between renovated and non-renovated properties.
Know the local rental market
Every property market is different and renters will expect different things depending on the local demographics. It’s a good idea to have a chat to your Professionals Property Manager to find out what renters are looking for, and most importantly what they would pay extra for. For example, some renters may be willing to spend more on a property with air-conditioning, or with a secure fence. Cosmetic improvements can also prove to be a big drawcard.
Choose the most cost effective renovations
You don’t need to choose the most expensive products when renovating an investment property, but you shouldn’t skimp on quality. Choose renovations that will give you the most bang for your buck in terms of adding property value. Popular renovations include updating kitchens and bathrooms and updating floors and walls.
South Australia to attract more commercial property investors
Stamp duty is about to get cheaper for investors looking to purchase commercial properties in South Australia.
The move comes after the SA Government announced, as part of the 2015-16 State Budget, that business stamp duty charges would be completely abolished in the state by 2018.
The government is gradually phasing out business stamp duty, with a one-third reduction in costs in July 2016, and a further one-third reduction to come into effect from 1 July 2017. Business stamp duty will be completely abolished from 1 July 2018.
The changes will help make SA one of the most attractive states for commercial investment and it’s hoped that it will help entice new business and developments.
Some investors are holding out until the new stamp duty charges come into effect, so there may be a slowdown of commercial transactions until after July 1. A similar scenario may be seen at the same time next year as investors hold out for the full stamp duty cut, however after this time it’s expected that commercial sale volumes increase will increase across the state.