Like any other financial investment for property investors, it’s about reducing your risk; the best time to consider the risks is before buying.
Far too often, property investors purchase a property and then find faults that affect its rent-ability or a costly building defect.
Some are easily fixed at a reasonable cost; however, others cause the property investment not to perform with the return on investment first foreseen.
The below scenarios show two real examples regarding fencing issues, one dealt with at the time of purchase.
And the other several years later with entirely different long term financial outcomes.
Case Scenario – Busy Intersection
A real-estate agent gave a tip about a property for sale as a mortgagee-auction in a good location in Terrace End, Palmerston North.
We viewed the property; the outside needed painting at some point but not urgently. Inside was in an overall good condition, apart from requiring a fresh coat of paint in the bathroom.
The property was four bedrooms and, if purchased at the right price, looked like a bargain.
On the negative side, the property was a corner section, on a busy intersection with a low brick fence; this would affect rent-ability due to vehicle noise and lack of privacy, for sure.
The numbers stacked up, but attracting a reasonable pool of suitable tenants was unlikely.
Because the cost of removing the brick fence was not feasible, the only solution was to build a new wooden wall on top of the existing brick fence to increase privacy and reduce road noise.
The property investor put the fence costs into the equation and a done deal. The new wooden paling erected on the existing red brick looked effective and was a real improvement.
The new tenant’s commented that they didn’t notice any traffic noise inside the house; problem solved.
Case Scenario –Fish Bowl
This rental property was close to a busy shopping centre on a corner section with a netting fence; there was no privacy, and for the tenants, it was like living in a fishbowl.
The property was hard to rent and attracted the wrong type of tenant’s occupancy were low, and the landlords had to deal with tenancy issues constantly, including rent arrears.
The property investors had owned the property for several years; unfortunately, the privacy issue was not addressed right at the start when purchased.
After discussion with the owners, the old netting fence got replaced with wooden for privacy.
As a result, fantastic tenants moved into the property, looking after it and paying rent on time.
If the privacy issue had been dealt with earlier, it would have saved alot of heartache, stress, worry and given a much better financial return for the property investors.
Are you losing money on your investment property?
🟢 All Ways Property has been using the same cost-effective profit strategies for many years now.
🟢 Not only on our rentals but also for our private property management clients, achieving excellent outcomes for them.