Adding Value
Unlike shares, an astute property investor can add value over and above what the market can provide.
If you purchase a unit there are some limitations to your ‘adding value’ scenarios. You nay elect to repaint, update soft furnishings and update included appliances. You could recarpet and retile but beyond that there is very little else you can do to adding value. Careful research and selection is very important as unit complexes can have hidden strata management issues and problems. The major ability to add value in a unit or town house is at the point of purchase. This yet to be realised value depends on where and when you purchase. So much of unit and complex value is wrapped up in the standards and behaviours of the neighbours who are in such close proximity.
If you purchase a house on a single block there are more options open to you. You can demolish and rebuild. You can renovate the inside and or the outside of the building or you could extend the building. If well done and with a eye to avoiding over capitalization, the cost of extensions can be much cheaper than the new added value of the changes.
At Beresfords we believe the optimal ‘adding value’ comes from an older style house positioned across a large subdividable block or even better across two blocks on separate titles. This provides a number of very significant adding value options for the astute investor. Not only will the land appreciate with the market movements, but you can also again demolish and rebuild. You can also renovate the inside and or the outside of the building or you could extend the building. However, the best gain could be from repositioning the existing house on to one of the separate titled and utilising the extra separately titles land for a new residence or to be sold off. You can also, if carefully selected, demolish the existing home and build a residences on each title. This involves a small development process which most investors can handle with our help. The property selection process is much more difficult but the upside can be very significant.
