Just bought a property - need ideas for higher return

Hi all
I recently bought a 4BR house in Mentone. Nothing flash however is on a decent size block (just slightly < 800 sqm). I will keep it for few years then re-assess my options (whether re-sell as-is, sell with plan/permits or develop myself)

The current rental yield is fairly low for this kind of property. I am just exploring what else I can do to increase the rental yield. I saw other posts re posting the property on Gumtree. Not sure if this would achieve a higher yield?

Would spending money on the kitchen and carpet be worthwhile?

Any ideas would be highly appreciated. Thanks

 

How much rental do you want? What was the cost of the house?

 

1 - find the best pm in the area
2 - ask them who the best kind of tenant is
3 - ask them what you need to do to the property to attract your ideal tenant
4 - do everything they suggest immediately up to your budget (i find carpet, paint, kitchens, aircon all add value in most situations)
5 - put the rent up to the new market level

 

I guess no.1 would be the hardest...

 

Cost is above $1M. It would never be positive cashflow however would like to get some ideas on how to increase the rent while I apply for plans to add value. Was quotes $500/week. Would be nice if I could somehow increase it to $800/week

 

?rent by room? But it's not for the faint hearted. And don't allow Kmart heaters

 

Hi Matt
Do you think it is worthwhile to spend on carpet, paint and kitchen which may take up to $15k for $200/week more in rent?

 

Rent room by room to students?

 

Why not Kmart heaters?
Anyway, I could try that but only if the return is significantly higher to be worthwhile. Unfortunately, I don't think the property is suitable for airbnb. I think it is more for family oriented area

 

Yeah I could. Do you think one of us would also need to live in the property to supervise and make sure the electricity etc is turned off when not required?

 

Congratulations on buying a house. My concern for you is your doing a due diligence for potential income post sale. Either it was an impulsive buy or your chasing capital gains. Hope it was the later....
Students are a nightmare....
I once spent $6k on a double shed & rented it out separately from the house, place had side access...

 

Yield in this area is minimal so yes, it is more for capital gains and opportunity with the land

 

Or up your insurance and then provide free Kmart heaters. Two per room ought to be enough.


Then use the new found funding to carry out your development.

 

Is there a way for landlords to join forces and boycott kmart?

Such a classic thread. A fun one to re-read and re-live.

 

Just be careful about rooming house regs. This kicks in over a certain number of residents.

 

I'm pretty sure this is @Lil Skater terrain for property management.

 

I think other members have missed the point with this one....
low yield is just nature of the beast for what you have bought.
If you are looking to do plans and permits then develop or sell, it doesn't make sense to me to outlay lump sum of cash in order to improve yield..
Ie spent $15-$20k or even $10k to obtain $30 extra per week.
= $1475 per annum after agents fees. If developing in a couple of years you are in a worse off position cash flow wise..
Need to assess the break even of your cash outlay and the tangible benefit it will create in additional rental income per week.

 

I think Gockie was inferring that kmart heaters chew alot of electricity!!-You know those little blow heaters for $20??!! This is very true !!!

 

Just sharing the wisdom of FullyLucky from SS... he was the master of DIY depreciation schedules and room rentals to students. I dont think I've seen him on this forum (or does he go under a different name?)

 

Congrats on your purchase, however it is going to be difficult to raise your rents up by more than 50% without doing major changes.

The reason your yield is so low is due to the large land content as much as you want land for capital growth the tenant typically wants as little land as they can handle. Most families would probably have enough land at 500-600m2 for their kids to run around in so the extra 200-300m2 is worthless to then or maybe they will pay $5-$10 more p/w for it.

Without knowing any further details of the property or what your skill set is things most people do is new carpet, paint, dishwashers are probably you best bang for buck however since you are looking at increasing rent by ~$300 p.w you would need to invest significant dollars to achieve this and that is if it is achievable.

The only way I could see you achieving this is to rent the rooms out room by room but seek professional advice around this as this is another can of worms. Otherwise your chance of getting $800 p.w. when being quoted $500 p.w to one family your odds would likely be 1 in 100 or 1,000.

Ways to increase your overall income is see if you can have early access to advertise the property (if not already agreed), this may save you 2-3 weeks of the property being vacant which.

Good luck