Kathy and Dean's Super Contributor.
Recently owners Dean and Kathy completed a project renovating an investment property in East Maitland. Their goal was to top up their super ready for retirement, planned in 10-15 years. “For us, the property gives you the ability to make your money work in a different way and it also means for super, not all your eggs are in one basket,” Kathy said.
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Initially, Dean and Kathy sought advice from Property Investment Services Manager, Pippa Rowntree, on what home improvements would help maximise the return from the property. However, the first thing that came to Pippa’s mind was that their tenant was approaching a 20-year tenancy. Once a tenant is in possession of the property for longer than 20 years the tenancy is then subject to regulations that can make it difficult to terminate the tenancy, irrespective of the reasoning behind the termination sought. “We had no idea about a 20-year lease being an issue until Pippa explained it,” Kathy said.
After completing a property health check, Pippa suggested that there were renovations that would substantially increase the rental income – between a 5-15% ROI – and given the current market, guarantee stronger future capital growth.
With all information on the table, Dean and Kathy decided to undertake the renovations that Pippa suggested. This required issuing the 90 days termination, but through their network, Leah Jay was able to assist the tenant in finding a new home.
Once the property was vacant and they had set their budget, Dean and Kathy began the renovations. Working with a jack of all trades Neil Thomas from NT Property Services, they even found their kitchen second-hand on Facebook Marketplace, “To keep those budget things down, Marketplace is a great place!” said Kathy.
The works undertaken –
- Internal repaint and garage repaint
- New flooring in all the rooms
- New kitchen
- New blinds throughout
- Improvements to garage
- Built-in wardrobes throughout
- Fencing the rear yard
The renovations came to a total cost of $33, 500 and the results were –
Get A Rental Property Appraisal
Maximise the potential of your property investment
RENT:
Before: $290/week After: $480 = 29% ROI
SALES APPRAISAL:
Before: $450,000 After $550,000 = 22% Capital Growth
Dean and Kathy were “absolutely happy with the outcome, it has exceeded our expectations.” Leah Jay secured a 12-month lease for the property and the extra $190 weekly rent goes straight into their super.
Key Takeaways
- Dean and Kathy enhanced their superannuation through a strategic property renovation, aiming for retirement readiness.
- They navigated a tenant's long-term lease with professional advice, ensuring a win-win outcome.
- The renovation, including updates to the kitchen, flooring, and outdoor areas, significantly increased both rental income and property value.
- Their experience underscores the importance of informed planning and professional guidance in property investment.
Wondering if it is worth renovating an investment property?
If you are looking for help with your property investment goal or, looking for general advice to start your property investment journey, get in touch with Pippa and the Investment Services team today.
