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Adding Value to Your Apartment

Apartment Renovation

Adding value to your Apartment.

There are a number of ways to achieve this. Lets start with a simple list, and then dive into each one after that.

Now….. some of these are more feasible than others, but more on that later.

  1. Renovation
  2. Conversion
  3. Rental return
  4. Adding carpark
  5. Paying out ground lease
  6. Building improvements
  7. Other factors

#1 Renovation.

Upgrading a dated apartment and making it more attractive to potential purchasers (or property valuers) is generally the most feasible, reliable and affordable method of adding value to your apartment.

This could be anything as affordable and as simple as a fresh coat of paint plus new carpet, or as comprehensive as a complete upgrade and remodel for maximum impact. New bathrooms and kitchens have a huge impact on both the perceived and real measurable value of an apartment. A property valuer should recognise and reflect this value increase in their property value assessment (post renovation).

In most cases renovations do not require consent or body corporate committee approval, which again adds to the simplicity and feasibility of taking this exciting step in your path to aesthetic beauty and asset increase.

The key to great renovations is to look at each apartment on its merits, & decide which factors will give you the most “Bang for your Buck” and create the biggest overall impact and impression. Creating emotional appeal is key, and a bit of an eye for interior design is helpful. See our blog “Creating an Attractive Apartment” for some great tips on creating stunning spaces with the “wow” factor.

For Apartment Renovation Specialists this is right in our wheelhouse, so contact us if you want some great free advice specific to your place.

 

#2 Conversion

By conversion, we are referring to the moving or erecting of nonstructural elements to improve the spaces inside the apartment. Examples would be converting a studio to a 1 bedroom via adding a wall, or a 1 bedroom to a 2 bedroom, extending the kitchen, creating storage space, creating a loft or mezzanine and so on. All of these actions can have a significant impact on value. Conversion could also mean the removal of a wall or structure to create more light and openness.

There are a number of caveats however to the actions described above. These include the fact that they would generally require approval from the Body Corporate Committee, and in some cases would require Council consent, especially if it means changing the configuration into something for which the apartment was not originally intended. It is also important to realise that for obvious reasons, structural elements & common elements cannot be touched. It may surprise you to learn that there may be common property elements in your apartment, like service ducts for example.

Please feel free to contact us to get advise on doing a conversion in your apartment.

 

#3 Increasing the rental return

If you are an landlord, then you will no doubt realise that the above actions of renovation and/or conversion would have an upward impact on the potential rent that you could earn from your apartment. Adding a carpark would also increase the rent that could be achieved.

In a similar way that lease earnt has an upward impact on commercial property, so too should rent have some impact on adding value to your apartment, especially for those buildings that are seen as predominantly rental stock. Even talking to a property manager to ensure that you are achieving the best possible market rent for your apartment right now is a good idea.

We can definitely help you with this, contact us if you want to have a chat about what specific actions you could take at your place to increase rental returns and add value to your apartment.

 

#4 Adding a carpark

While it is not very common to be able to do this, it deserves a place on this list because it would naturally significantly increase the value of an apartment, be it only by the value of the carpark purchased & legal costs, or incrementally more dependent on a number of factors including; the demand for carparks at the particular building, the location of the building within the city, and what you actually paid for the carpark versus current market values. All said, just know that sometimes it is possible to purchase a carpark within the building, and have it legally detached from the previous party and attached your property by your solicitor.

 

#5 Paying out the lease

It is very rare that this would even be possible, let alone a financially feasible option if it was, however it is on the list because it can and does happen occasionally, where a leasehold property is able to be “bought out” of its ground lease, for a figure that equates to a net gain in value for the owner. In other words, if it cost $150,000 to buy out the lease, and the property then valued up incrementally by $300,000, well you can do the math…..

Freehold property is significantly more valuable than leasehold due to the lack of ground rent, and the security of complete ownership, which creates the opportunity gap, however as alluded to, it is rare the leaseholder covenants allow it, and if they do, also rare that the financials of the transaction stack up.

 

#6 Building Improvements

When improvements are made to the common areas of the building your apartment resides in, this can have an upward impact on individual unit values, as the building becomes more attractive to owners & investors. This can be another way of adding value to your apartment.

Think you cannot have any impact on this? Think again! You could put yourself forward as a committee member to help make good decisions about your complex, and/or attend Annual General Meetings to have your say and learn what is happening in your building, and when.

Some examples of actions which would make a building more attractive are: a spruce up and modernization of the entrance foyer, a spruce up of other common areas like hallways, and painting the exterior of the building.

 

#7 Other Factors

There are a few other factors which can increase the value of your apartment, outside of market value fluctuation and appreciation. These tend to be outside influences such as; public transport developments nearby, improvements to the neighborhood like parks, shops and amenities and so on. It is good to be aware of the town planning prior to purchase, to make the most of the opportunity timing. Another big factor which impacts values significantly in a building in an upward fashion, would be when remedial issues such as leaky cladding are resolved, & a new Council Code of Compliance is issued for the building, which has an immediate & dramatic upward impact on unit values.

I hope you enjoyed our blog on Adding value to your Apartment.

Contact us anytime, if you would like to chat about your apartment and your “value up” opportunities!