[Melbourne] - Renovation of IP before selling dilemma

Hi guys,
I am contemplating my options for an investment property I own that is located 6 km in the north-eastern suburbs of Melbourne.

It is a 2 bedroom / 1 bath, ground floor with carport in a 1970s apartment block of 12.
Probably a ~7 min walk to the train station and few minutes walk to the shops. Floor area is about 63 sqm with no balcony.
Have owned it for abit under 4 years now and haven't had any problems with renting out (~5.5% gross rental yield as % of loan). Currently under a 12 month lease but will end in Q1 2018.

If I chose to sell it, I am thinking of vacating the tenants and hiring display furniture to spruice up the property.

The kitchen is a little dated (but completely working), and have been told the curtains and carpet should also be changed.

I would imagine the target demographic are young professionals, people that are single and potentially older people?

My questions that i'm hoping to bounce off you guys are are:


- Should I spend money on the renovation / touching up as per above - will I get a return on renovation money vs un-renovated? What sort of budget without over capitalizing?

- Staging the property will mean kicking out the tenants - I can see the risk if the auction falls through and doesn't sell, i'll have to search for new tenants if I retain the property

- Keeping the tenants without doing any work will be less stressful (secure rental income on a month-to-month, less money spent on staging / renovation), but I feel buyers might perceive it as "just another rental property that hasn't been loved..." and therefore attract less emotional bidding?

Not a forced seller but proceeds will be to put into a PPOR.

Comps in the area suggestion low $5's. They have been done up but are in a less superior location

Thanks.

 

1. Why are you selling it with old holding it for 4 years?
2. If you were to sell, who is the target market? That would be your starting point as to whether your should Reno (and to what extent).

 

Main reason is to use proceeds for other investments / offset on another property.

Target demographic - young professionals?, people on single incomes and potentially older people? It's very much an entry level type property that is in a convenient location with trains.

Thanks wylie - those are good questions. I've uploaded a floor plan and pic of kitchen.. Might actually check out how other kitchens in that block look..

 

Agree paint white.

 

You can wait till the lease is up, change the curtains and carpets. Kitchen looks ok but the blue needs to be taken out.

Omce renovated, you can potentially airbnb it while you try to sell it. Just block off all the Friday nights from the calendar so nobody stays there on those nights. Then once you get an offer you are happy with and the contract goes unconditional, keep airbnbing it till settlement. You want the place furnished for the sale campaign anyway so why not have income while you do it... you will need sheets and towels etc but it's something easily recouped.

 

Hey guys, thanks for the ideas.
Cheers