How you can look to maintain your apartment at its optimum value, Aaron Tunstall writes
One of the main reasons that we invest in property is the assumption that it will increase in value. But you can have an impact on how much of a value increase you achieve. I'm going to state the obvious here: A run-down, shabby apartment is worth less than a smart, well-maintained apartment. Dated, faded apartments - or those furnished with tired worn-out furniture - make tenants turn up their noses the minute they walk in the door. A poorly-maintained property reduces the amount of rent you can charge and makes it more difficult to find tenants. It even goes a small way to dragging down the quality and reputation of the whole building, which has a big impact on the overall value of the unit.
Yet we regularly see owners who try to spend as little money as possible on their apartments.
Having the attitude that "a penny saved is a penny earned" is fine when it comes to spending on consumables, but it's not the attitude to take when it comes to investment. Investment is what you're earning the pennies for! Penny-pinching owners tend to find themselves with scruffy apartments that attract similarly scruffy tenants, who treat the apartments carelessly. You don't have to spend a fortune on your apartment, but by maintaining your property well you can keep its value at its maximum.
Choose a good property manager
Poor management will quickly result in poorer tenants, lower rents and an overall devaluation of your apartment.
A simple way to protect your investment is to choose a top-quality property manager who will:
- Choose the best-quality tenants available for the apartment
- Manage the tenants and check regularly to ensure they are treating the apartment appropriately
- Keep your rent at the market rate
- Tell you what maintenance needs to be done in a timely way
- Help you to organise maintenance between tenants
- Attend AGMs and represent your interests to the body corporate committee
Deal with the little jobs immediately
When your property manager tells you that a job needs to be done, organise or authorise it straight away. Problems like mould, leaks and broken appliances can all rapidly escalate to cause more serious issues if not dealt with immediately.
Auckland apartment owners should also budget for an annual fumigation and pest control - bed bugs have become a problem that will drive your tenants out if you let them proliferate.
By promptly tending to any problems that arise, you also keep your valued tenants happy and comfortable.
Budget for upgrades
Plan ahead to replace furniture, appliances and TVs regularly. Existing tenants really appreciate these changes, and new items make a big impact on prospective tenants when vacancies arise. In addition, newer appliances are more efficient and less likely to break down or leak.
We've found that new flat-screen televisions and wireless broadband are two item that tenants love. A TV upgrade will almost guarantee you low or no vacancies, and wi-fi will be virtually a given in a few years' time considering our increasing dependence on internet access.
Undertake renovations between tenants
When your tenant vacates, that's the ideal time to give your apartment a makeover. A coat of paint, new carpet and a set of new curtains are enough to make a huge difference to even the grungiest old units. We have had some excellent examples of apartment makeovers which have increased the rent and the value of the property almost overnight.
Ideally, budget to do some renovations every year. Tenants will fight for a renovated apartment and may be prepared to pay over the market rent for something exceptionally clean and smart.
And last, but not least...
Pay your body corporate fees on time
By delaying payment or failing to pay, you leave your body corporate committee short of funds to do the maintenance required on the building. Added to that, you will incur hefty penalties for failing to pay on time.