Of the numerous misconceptions surrounding property investment, the belief that it is a ‘set-and-forget’ strategy is perhaps the most common. However, successful property investment is not just about buying in a good location, finding quality tenants and leaving it at that.
If you buy a work vehicle and continue driving it without regular servicing, over time it cannot be expected to perform at its best. The same is true with properties.
As most owners appreciate, keeping up with repairs and maintenance on an investment property is important to ensure its success. But it is also prudent to regularly consider ways to improve the premises and the return on your investment.
Owners don’t have to tackle this on their own. Senior Property Managers (SPMs) can provide advice about work that properties might need to ensure they stay tenanted and achieve good returns.
Beyond this, they can also work with owners to enhance the property, which might involve some capital improvements that could help lift overall return on investment.
One of Leah Jay’s Senior Property Managers recently took on the management of a vacant property that the owner was having trouble re-letting. The SPM quickly identified that maintenance had not been completed for some time, leaving the property in a tired and neglected state.
The property had also had a long-term tenant and therefore the rent had not been increased for some time due to the condition of the property.
After engaging the owner in a discussion about their investment goals, the SPM arranged for quotes to be provided for maintenance work and improvements, including fresh paint, new carpet, courtyard renovations, and a refreshed facade to provide street appeal.
After the recommended improvements were completed, the property achieved $540/week; its previous rent had been $370/week. This reflected a return of 19.5% on the expense of the improvements.
Other examples demonstrate that small or simple improvements can still make a big difference. One property achieved a 14% return on investment after spending $12,500 on new paint and carpet, while another managed a 17% return after $18,000 was invested into a re-faced kitchen as well as fresh paint and carpet.
If you’re interested in maximising your property’s return on investment, get in touch with the Leah Jay Investment Services team, who can provide independent information and advice.