How to get your property above market value

Savvy investors (and most B.Invested clients) purchase for below market value in order to build growth and equity on the way into the market. So, if that’s the case, how do you turn your asset into something that is valued above your purchase price as quickly as possible? Something that will provide the equity you need to snap up the next deal when it presents itself? And that gets the best rental income possible in the meantime?

Presentation could be the first step

A purchase price below market value may mean there is something minor about it that can be rectified to make it more appealing to the market. It may just need a little work done to boost its value and its rental income.
Because it is an investment asset, you don’t need to break the bank by installing extravagant features or fittings. You may not need to go all out on a new kitchen or bathroom either but rather tweak a few things to at least make it equal with the competition.
If your property has shabby carpet or paint peeling off walls for example, you are not adding value by re-carpeting and re-painting, you are simply getting the property to an acceptable state to meet market expectations. Re-carpeting every seven years and re-painting regularly are tax deductible and keep your property up to standard.

How’s the feel?

Think about the climate… A lot of properties under Blink Property management are in climates where it’s hot and humid and ventilation is a must. So, unless you have a ceiling fan in every room and fly screens on every external door and window, you are already behind the rest of the market. Ideally, you would also invest in air conditioning. An investment of a couple of grand in the scheme of things is well worth it. Say you purchased for $30,000 below market value and spent $5000 on minor changes…you’re obviously still well ahead, with the added bonus of potentially increasing your weekly rent too.

Hacks to max value

Now that your property is up to scratch with the competition, there are a few things you can do to get the maximum benefit from the minimum expenditure.
Kitchens and bathrooms are two of the most important features of a property. If they look tired or outdated, it will turn people off.
Imagine walking into a bathroom with a shower curtain and water swelling marks on the vanity, plus old orange tiles…would you want to rent or buy that property? Didn’t think so.
But replace the shower curtain with a glass door, spray paint the tiles white and replace the vanity and you will have a bathroom that looks completely different, without having to spend tens of thousands of dollars on a new one.

The same applies to a kitchen. You may not have $20,000 plus for a new one, but you may have $5000 you can spend on some new appliances. A slick new fridge and dishwasher will change the look and feel of the kitchen and also mean tenants don’t have to buy their own and move them in and out of the property.

Tune into the rental market

Some investors suffer because they don’t stay on top of what the rental market is doing.

Right now, the market is soaring, with vacancy rates at record lows and a massive competition pool of tenants. Meanwhile, the construction industry has slowed to a crawl and there are not enough projects coming to market to keep up with the surge in demand. Then you have the lifting of the migrant cap, which means hundreds of thousands of foreigners arriving in Australia to put further pressure on supply.

By simply raising your rent to the market rate at the moment you can turn that property into a value-adding machine.
These conditions won’t last forever, of course, so it’s important to make hay while the sun shines.

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