Sven & Matt had a conservative budget of $200,000 but were keen to build a large property portfolio with the goal of long-term wealth creation. They were happy to do some renovations to the property they bought, in order to increase equity and get a better rental return.
The Aus Property Professional’s team have a knack for finding the hidden gems in the property markets and drawing out the true potential for maximum returns. They were teamed up with buyer’s agent Tome, to help them on this journey.
With a smaller budget, the potential areas were somewhat limited. As part of our research phase, Tome focused on regional areas with low vacancy rates, high rental yield and strong growth prospects to achieve the best possible results for Sven and Matt.
Through one of our many agent contacts, Tome was able to get exclusive viewing of a property coming onto the market that fit the brief to a tee. It was a solid brick, attractive 3-bedroom, 1-bathroom home.
The inside of the property, however, had plenty of potential for an uplift. Knowing that his clients were open to the idea of renovating as part of their strategy, this was a great opportunity. Tome was able to secure the property for his clients at $160,000 which was well below their $200,000 budget, allowing them enough funds for their renovation costs.
The major area of the renovation was the kitchen. Sven and Matt had a new kitchen installed which immediately brought the home back to life. They were careful not to over capitalise and installed a modern but basic kitchen to keep in line with the potential tenant demographic. They decided that in order to keep costs down, they would only replace the bathroom vanity and do a cosmetic touch up to the rest of the bathroom. They painted the bathroom tiles and refreshed the grout.
They painted the house internally and replaced the carpets throughout, along with installing new blinds and lighting fixtures.
The exterior was uplifted with some minor landscaping, as they had a beautiful flat block to work with and this instantly improved street appeal. In total the renovations cost $22,500 bringing the total property price to $182,500.
Before the renovations, the property had previously been rented out for $250 per week which was already a great gross rental yield of 8.1% but following the completion of the renovations, the property is now renting out for $310 per week.
This has brought the returns up to a phenomenal gross rental yield of 8.8% and increasing the value of the property. Sven and Matt plan to use the equity manufactured in this home as a deposit for their next project.