What are the improvements you can make to a property to improve its value.  We do know that not all extensions, renovations or improvements to a property will add value, so therefore it is easy to overcapitalize.  We ask Ben Kingsley to tell us what he sees as improvements that will add value.
Kevin:  What improvements will actually improve the value and the return on your investment property? A lot of people have made the mistake – I know I have – of throwing money at a property and thinking that any improvement’s going to improve the value. Not so, according to Ben Kingsley, who is the CEO and founder of Empower Wealth and also the Chair of PIPA.
Hi Ben. Thanks for your time.
Ben:  Good day, Kevin. Thanks for having me on.
Kevin:  It’s a pleasure, mate. Not always the case, is it, that any improvement is going to improve the value of a property. What have you found actually improves it overall, Ben?
Ben:  The number one thing is painting, Kevin, and decluttering. If you can paint… The material cost is quite low; it’s just the labor cost. If you’re going to do a bit of that yourself, then obviously that labor cost is also reduced. The number one thing to improve a property is a paint job.
But don’t get too cute with it. Just keep it simple, nice, clean, bright, fresh colors. And obviously soft, consistent colors like classic whites, off-whites, arctic whites, those types of things are the number one things.
I think you made a good point, Kevin, about what shouldn’t you do? Some of the mistakes I’ve seen are probably… The biggest one is if you’re going to do structural changes, make sure that the structural change is going to meet the market.
There’s no use in creating a third bedroom but that third bedroom, you couldn’t swing a cat in. It just becomes a study nook or something like that. So, by the time you put the labor cost into those types of things, is it going to create the value or was it better to have a really large second bedroom is a good example. I see a bit of that happening.
I also see around the custom carpentry work… It is the labor cost that is the most expensive when we’re doing big renos. If we’re bringing the tradies in to relocate pipes or do custom carpentry work, that may not be as big a bang for buck as potentially just getting something from Ikea or some type of mass-produced kitchen cabinet or bathroom cabinet or something on those lines.
That’s where I see people going “I need to buy the whale,” when you have to meet your market. If your market is mid-range or lower, meet that. If it is absolutely top-end upper, then brands do give you results.
Kevin:  Just listening to what you’re saying there, I was thinking and reflecting back on how we’ve changed in the way we live. We used to actually treasure having a bedroom, even though a small bedroom, but as time has gone on, all of the programs now, we’re opening rooms up. We’re making things a lot more open, a lot more spacious, because that’s a reflection of how the family has profile has changed, Ben, as well.
Ben:  Yes, totally. Obviously, we’re having fewer children, so having that spare room for relatives who may be visiting isn’t as important as having that open-plan living-dining and a bit of al fresco piece out the back. We’re definitely seeing that. And then obviously, the parents can jump on the couch if they’re visiting. Or, they can basically rent around the corner with Airbnb. So, different things like that where they’re only coming once or twice a year.
We have to think about what we’re trying to plan for, but certainly the template for the new mainstream owner-occupier-appeal home is bedrooms up the front, divided by bathrooms for that noise separation, and then living and entertaining out the back.
Kevin:  It’s interesting, going right back to the start of what you said, the two improvements you highlighted are two of the cheapest and quickest that you can do – just decluttering and painting.
Ben:  Yes, totally. Clean up the yard, declutter, keep it to a minimum. No one wants to see other people’s personal belongings or wedding pictures and hundreds of pictures. Just make it clean, because they obviously have to imagine that home as being theirs, and we want them to connect to the floor plan, we want to connect to the space, and that’s what they’ll pay a premium for.
Kevin:  Good talking to you, Ben Kingsley. Ben is the CEO and founder of Empower Wealth and also, as I said, the Chair of PIPA. Thanks for your time, Ben.
Ben:  Pleasure, Kevin.