Adding value to your investment property
One of the most exciting aspects of investing in property is the potential to add value without having to wait for a market uptick. Some well-planned renovations or a development project has the potential to deliver healthy gains.
The key is to do plenty of research. Renovations can be costly, and knowing the types of features that will appeal to tenants can help you focus on improvements that will deliver maximum value. Ideally, renovations should bring an uptick in rent plus an increase in the property’s market value.
Opportunities to add value aren’t restricted to a fresh coat of paint. A development project can see you unlock the full potential of a property. There’s no shortage of options to choose from, be it sub-dividing a single block, adding a granny flat or building multiple dwellings on a vacant block.
Whatever your development plans, start by getting to know the council rules for your area. Major developments, and even many renovations, need to meet strict council requirements, and having the tick of approval from local authorities is essential to any project.
When you’re weighing up different ways to add value, don’t overlook the impact of tax. The cost of some renovations can be claimed immediately, but other expenses need to be written off over time. Your tax professional can let you know the rules that apply to adding value to your investment property so that you claim all the deductions you’re entitled to, while still staying within Tax Office rules.
In this chapter
Take the next step to buying your first home
One of the great aspects of owning a rental property, is that by completing a few renovations, you could earn a higher rent ...
Successfully renovating an investment property means thinking about what will add value and tenant appeal to the place.
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