IN THE 2020 REPORT1 by Elite Agent Magazine, there was some discussion on the types of jobs and roles that you might see in real estate in the future. Domain Property Advocates (DPA), under the guidance of Director Melanie Dennis, is already leading the way with the use of their own in-house makeover team, and improving owner ROI in many innovative ways.
Property investors are more focused on maximising their return than ever before, which is why we now include small and large scale renovations as part of our service. This might include obtaining quotes, executing plans and, once completed, devising a cutting-edge marketing campaign complete with a YouTube video to maximise the property’s online presence and showcase the renovation.
Investors generally don’t have the time or the necessary expertise to roll out a renovation of any scale without it taking an unreasonably lengthy period of time, costing them big money with a vacant property while works are slowly completed. With a crew of preferred trades who satisfy our strictest selection criteria, DPA will negotiate the most competitive price and ensure the work is completed quickly. Experienced in the delivery from start to finish, a planned timetable of works is compiled for all parties to agree and adhere to.
With busy lives and a lack of expertise, it isn’t unusual to see renovation projects blown out by six months when managed by a landlord. This can be due to not totally understanding trades and the order in which the work should occur, or simply a lack of time to dedicate to the project. Managed carefully and competently, renovation turnaround time is around four weeks for DPA, depending on scale of course.
Broadly speaking, DPA see a return of over 10 per cent with each project undertaken. This is simply taking into account return for money spent, not forecasting the increases in capital growth. We ensure the proposed works can provide enough return to make it worthwhile before commencement.
The return on investment can be significant; in one case we achieved over 13 per cent with work to the kitchen and bathroom, as well as polishing existing flooring and adding new carpet to the bedrooms. The garden was also in need of some attention, with an extensive clean-up and the removal of shrubs and trees that weren’t suitable.
Whilst the return on the money spent is of supreme importance from a financial standpoint as property managers, broadening the property audience has proved to be very beneficial. Leasing the property quickly for an additional $180 per week to a high-quality tenant certainly met the client’s expectations.
Outsourcing the work doesn’t imply the investor loses the ability to provide a personal touch to their investment if they desire. Their involvement can be as considerable as they choose, with the ability to make fittings selections and colour choices. Our recommendations to them are always to choose close to neutral, inoffensive colour schemes with durable and quality fittings, maintaining the property as a blank canvas to appeal to the broadest audience.
Knowledge surrounding the significance of property depreciation and the appropriate schedules required to maximise a client’s potential claim is crucial. DPA facilitate a scrapping report prior to the works being completed, as well as a depreciation schedule at the conclusion. This ensures our client’s accountant has all the correct details for the property. We take pride in comprehensively and seamlessly managing the process without distracting our clients from their busy lives.
Outdoor spaces can also provide significant return. In the case of one property, with large garden beds in the courtyard, we reduced the garden beds to a more appropriate size alleviating a ‘cramped’ feeling. We also painted the internals in a fresh, neutral colour, and gave the kitchen a tidy-up. This resulted in a 23 per cent return for the owner. The property, now with an inviting and functional outdoor space, attracted a more suitable tenant and leased quickly for an additional $110 per week.
Apartments can have a limited point of difference in a competitive rental market, with thousands of dark and dated apartments up for lease each year. Modernising the kitchen and bathroom can make so much difference in attracting high quality and discerning tenants. Again, a fresh neutral colour palate is important. In the case of this renovation the shower over bath was replaced with a separate and modern shower – more in line with the professional tenant the client wanted to attract. The renovation resulted in a 10 per cent return on investment, with the property leased quickly for an additional $105 per week.
Monitoring the renovation progress is imperative to realise expected outcomes. DPA conduct regular and thorough property inspections throughout the process, ensuring the works are completed to the highest standard and, most importantly, that the completion is mirroring the proposed schedule.
There will invariably be hiccups along the way with any renovation, but having expertise in the execution ensures they are dealt with swiftly and with minimal disruption to the calendar of works.
1 Download a copy of the 2020 report at eliteagent.com/2020report.