Adding Value without over Capitalising.

[dongiblin]

Have just recently purchased a 3 bdrm property with a section size of 733sqm and a single garage.There is a large part of the section out front of the house which could easily accompany a double garage and some sort of landscaping.Out the back there is enough room for a decent size bbq/entertainment area and a spa pool.We are planning on adding an ensuite to the master bedroom and creating a deck out front from the living room.Apart from utilising the wasted space inside the house are there any ideas out there on what would add value in terms of landscaping and house alteration wise without over capitalising.

[Orkibi]

few Option for you to think about.
The Best value for money in this market is increasing the return.
sounds like good size section so you may be able to Build a Minor dwelling on it and get extra cash flow and effectively increase the rent and value.

check if rents are at market rent you may have room to lift them without doing anything.

add another bedroom.

if the rental return is higher as a result of your investment then you minimize the risk of over capitalizing.

it also depend on the location, don't invest 380k in an area where houses are selling for 250k.
speak to a register valuer and ask them what would potentially add value.

hope that gives you something to think about.

BBQ, Garden shade etc are not going to put money in your pocket!!

[revdev]

Have just recently purchased a 3 bdrm property with a section size of 733sqm and a single garage.There is a large part of the section out front of the house which could easily accompany a double garage and some sort of landscaping.Out the back there is enough room for a decent size bbq/entertainment area and a spa pool.We are planning on adding an ensuite to the master bedroom and creating a deck out front from the living room.Apart from utilising the wasted space inside the house are there any ideas out there on what would add value in terms of landscaping and house alteration wise without over capitalising.

Check with your council, as I know some no longer allow garages to be built forward of the house (i.e. on the front of the section).

Forget the spa pool (unless this is a top of the range house)...and then still forget it.

Check the expected rents for a 4 bedroom house, get a few quotes in and see what the return gives you. For example; An extra room might generate $120 p/week extra in rent and you have quotes for $35k to build the room....equals $6,240/35,000 = 17% ROI

Ensuite could be a classic for over specing the house, check with some agents as to whether it is appropriate for this type/age/style/cost of house. Although if you go to a 4 bed house, then 2 baths may be an advantage.

Deck from the living room adds indoor/outdoor flow. It will increase the rent and it's rentability.

Landscaping won't increase the rent, but will lift the street appeal of the house therefore assist with renting. Also ease of ongoing maintenance.

I get the feeling you are "itching" to really improve the house...just be very careful in this market to keep a lid on your costs. It MUST be about return on your money, not about making the house look NICE.

All the best,
G

[SuperDad]

Dongiblin,

The way you talk about the property suggests it is your own residence.

Paul.

[dongiblin]

The property is my own residence and I was thinking about building up the equity in it by adding value to it and then use this as a deposit for an investment property well thats the plan.So am reluctant to build a minor dwelling on it.On getting a valuation before the renovation is it really worth it? or should I save the money and just get a valuation after the renovations.

[revdev]

On getting a valuation before the renovation is it really worth it? or should I save the money and just get a valuation after the renovations.

The great thing about getting a valuation done prior to renovation, is that you can talk with the valuer about what your plans are. He/she can inform you of the after-renovation valuation (ARV). They can also advise of the top limit for the street/area. This information can stop you overcapitalising.

For the sake of a few hundred bucks, it's money well spent.

Cheers,
G

[dongiblin]

Anyone know of a good valuer in the ChCh area?

[Orkibi]

Ford baker are good. www.fordbakervaluation.co.nz

[Monkeyboy]

Mark Shalders - DTZ. Does excellent analysis all round. Has done before and after for a number of clients from house to flats to development. 03 363 5057

Also Don, why don't you come along to the PT Dinner and evening on the 25th May. Will be a great opportunity to talk and network with lots of people who have done similar things.

[kane656]

I've used Ford Baker. Very experienced in and around Christchurch with an excellent reputation.

K

[sarahd]

re: Adding value.

I was thinking about redoing a kitchen in a rental - it needs modernising. If I redo it, for less than $10,000, and put up rent by $20 per week this will cover it.

Tenants are keen - they will move out for a week and I will increase rent by $20 per week.

If they decide to move out permanently, I will still get the increased $20 as it is slightly under rented anyway.

Is there any reason I shouldn't go ahead with this? Works for me, works for them, doesn't cost me anything. Is there something I haven't thought about?

[lima]

Re : replacing carport with garage.

One of my rental properties has a double carport with metal posts supporting the roof - the metal is getting eroded by rust. Pretty severe in places. I am worried it may capsize damaging tenants car, injuring someone or worse and had better do something about it.
I was thinking that rather than just replace the metal supports - may as well get a garage put in - although not in the same place as where the carport is - as garage will be more practical, increase rent and value of property.
Garage would need to be sited on front lawn - not in same place as carport as it would block access to front door.

My questions are:

This would be part renovation - (repacing damaged carport with something of similiar function but better) and part 'upgrade' as a garage is 'better' than a carport. So, how do I work out what percentage of total cost of garage i can claim on tax return?

This is in West Auckland area - can anyone recommend merits of Skyline vs Versatile for Garages? in terms of value.

Thanks
Lima

[Tan]

The garage will be a capital item, so no tax back, but depreciation claimable.

[Stickman]

Re :

This is in West Auckland area - can anyone recommend merits of Skyline vs Versatile for Garages? in terms of value.

Thanks
Lima

So you are talking about demolishing the old structure, pouring a new slab in the revised location and building a new garage? Either one will offer a very similar service, just make sure that any pricing you get is all inclusive. Many will not price for a concrete slab or may have exclusions you will want to be aware of.

[lima]

Thanks Tan and Stickman for your helpful comments.

Another possibility I just though of is to get the existing carport fixed up - ie new metal posts and get the garage as well. If it is not a ridiculous price for the carport posts.
Cheers
Lima