In today’s show Ben Kingsley, from Empower Wealth, tells us the 5 things you can do that will add real value to a property.
Kevin: I asked Ben Kingsley from Empower Wealth to tell me the things that he’s seen in his experience that will add true value to a property. Was it a big mission for you, Ben?
Ben: No. I think it was pretty straightforward, Kevin. There’s a lot of common sense, hopefully, in what I’m about to give to you and the listeners.
Kevin: Yes. Let’s get into it. What are they?
Ben: I think the number one is paint. The easiest and safest bet is to paint it. To get some cosmetic improvement, painting is the first step – both internal and external painting – and it’s certainly the cheapest way in which you can get more bang for your buck.
Kevin: It certainly freshens everything up, doesn’t it?
Ben: It does. Even on the pictures to get inquiries coming in, you can’t see all those little inconsistencies in the property. Basically, the photos come up great, so that gets an audience, and when you get an audience, you have a chance to [0:51 inaudible] if you’re looking to sell, but also, from the valuer’s point of view, he’s going to go out and first impressions are always important.
Kevin: Yes. Don’t make it anything too garish, either, when you’re picking colors.
Ben: No. Go basics. Don’t go your pastels, don’t go your styles. Just keep it to your shades, your whites, your light grays, and those types of things.
Kevin: Yes. You can actually bring color in with some of the accessories – cushions, and so on – can’t you?
Ben: Kevin, you just led me into the second one, which is basically internal cosmetic tidy-up – things like the floors, the blinds, and those types of things where you can bring a bit of color and a bit of style in. Sometimes, light fittings, but just don’t go over the top.
You have to remember this is an investment property. We’re going to hold on to it, and then, ultimately, you don’t want to go over the top. But certainly, those types of things where you can bring the cushion covers and those types of things for the first impressions for the tenant when they’re looking to come hopefully let your property.
Kevin: Yes, and don’t over-clutter and don’t make it too eclectic, either, I’d imagine.
Ben: True. That’s exactly right. It’s keeping it simple, and by over-cluttering, what you’re talking about there is give a sense of space. Even if it’s small, the classic case of when selling agents are trying to impress potential buyers coming through, those smaller second bedrooms sometimes in the unit blocks and, certainly, some of the pokey bedrooms, they’re smart; they put a single bed in there rather than trying to clutter in a double bed or something along those lines. The same principles apply for value-adding.
Kevin: Your next one?
Ben: Structural. If we are going to spend a little bit of money, always as an absolute minimum rule of thumb, every dollar spent, we want to get a $2 return. But if you’re going to do structural, I have a couple of little tips here. The first one is add a bedroom. At the end of the day, if you have a very large one-bedroom apartment and you can potentially fit a second bedroom in, that’s an additional income generator because you can, obviously, get the rent based on a two-bedder rather than a one-bedder.
If you can put some stud walls in and get a second bedroom in, that’s always a good one. And even on a house, if you have some large living zones and you can separate those into a bedroom, that’s where you’re going to get that cash flow coming through.
If you’re looking to do the broader structural stuff, then focus on this. Try to convert the older style properties whereby the kitchen wasn’t a focal point to convert that into an open plane kitchen/living, and the latest move and trend is having that indoor/outdoor alfresco space.
If you’re going to put some of that structural stuff in place, don’t overcapitalize, but make sure that if you are going to do it, it’s all about adding space and openness, and open plan, and having that sort of kitchen as part of that conversation space.
Kevin: Yes. That’s the new way to live, isn’t it? In those great indoor/outdoor areas. What else have you got for us?
Ben: Yes. The fourth one there is external appeal – in terms of first impressions, again, are really important. Things like when you’ve got busy gardens and cluttered gardens and overgrown lawns, it’s all about reducing clutter. Keep the lawns mowed.
One of the best ways you can add value is some of the local councils have free mulching that you can go and pick up. Go and throw that on the garden beds. This doesn’t cost you anything other than your time to go and get a load of woodchips, and then throw them down on the garden beds.
Again, paint fences and keep the exterior of the building looking really presentable at that most important time, whether it’s when you’re getting it valued or whether you’re bringing it up for re-let.
Ben: Finally, the big one, subdivision. Even though this might not relate to the actual property itself, if you want to pick up an equity harvest, you may have a significant block of land, you may have existing dwelling where there’s a three-meter clearance between the dwelling and the fence line, and a large backyard. Well, a battle-axe subdivision is certainly going to be one of the best ways to add value to your investment portfolio, whether you decide to sell that block off or put a second dwelling on that to increase your cash flows. All of those, it’s a larger investment, but it’s a big one. That final one was equity harvest.
Kevin: A wealth of experience coming through, Ben. Thank you so much for your time. Ben Kingsley from Empower Wealth with his five things that you can do to add true value to a property.
Ben, thanks again for your time.
Ben: Absolute pleasure, Kevin. Thank you.