When it comes to adding value to a CBD investment property, many property owners think that renovating is the key. However, spending more on your apartment doesn’t automatically mean it is worth more – this is a common misconception that many people fall in the trap of believing. The truth is, sometimes these costly makeovers could actually be doing more harm than good.

So, which renovations are worth their while and which ones are possibly a waste of time and money? To help shed some light, here are five renovations that could potentially have a negative impact on the value of your apartment and are worth reconsidering before jumping in the deep end:

Let there be light

Any renovations that block the apartment’s natural light are a no-go and can instantly devalue the property. Instead try to maximise natural light, especially in the living areas.

Know your market

Ensure your apartment space is designed with your tenant in mind. For example, if it appeals to active city workers or diligent university students then a decent desk space would prove highly beneficial. That little study nook in the corner that you considered removing to extend the kitchen bench could actually see the potential weekly rental income decrease - so it is a good idea to first talk to you agent to identify exactly who your target market is and what appeals to them before doing any major renovations.You also may like to consider checking with the on-site managers regarding colour scheme for the building, which may give you the option to rent your unit long term or short term through the on site managers.

Steer clear of current trends/loud designs
When renovating an apartment space you need to think with your head, not your heart. Thus, neutral is always best! Sure, the latest styles might have a place in your own apartment but they move too fast to see a positive return when it comes to your investment. For example, a bright yellow kitchen with chevron splashbacks might be considered stylish now but next year when orange makes a comeback you’ll just be left with a dated kitchen and an empty pocket.

Avoid anything custom made

A CBD apartment needs to appeal to as many potential tenants as possible. Adding custom-designed furniture and fixtures could deter people and leave you with excessive out-of-pocket costs in the meantime. 

Don’t break regulations

When renovating a CBD apartment it’s crucial that you’re aware of body corporate rules and regulations. Renovate outside of these and you could be penalised severely.A few examples include in particular wooden flooring, fixed structures on the balcony, window dressings backing in the wrong colours etc…

Thinking of selling your CBD apartment and want to do some upgrades to increase the value?  First, have a chat with our CBD apartment expert and contact Hannah on 0419 782 133.

The 2015 Federal Budget has been the talk of the town over the past week as the nation weighs in on the forthcoming changes for the year ahead.

In particular, we have heard a lot in the media about the tax measures for small businesses ie. the tax breaks for purchases up to $20,000 and tax discounts of up to 5% for small, unincorporated businesses.  We have also been hearing a lot on the $2 billion savings in health and the Medicare review. 

Some Australians will be affected greatly by this new budget, and some not at all.  What we would like to delve into further today is what influence could the 2015 Federal Budget have when it comes to real estate.

To better understand the effect we could be seeing in the near future as the budget rolls out, let us look to key groups in the market and what changes they could experience as the budget is rolled out this year:

FAMILIES

Joe Hockey sold this to the nation as a family friendly budget with his catch-phrase ‘helping Australians to have a go’.

In this era of low interest rates and steadily increasing growth in house prices, we have seen a jump in consumer confidence when it comes to the property market of late.  With the additions in this year’s budget such as the $3.5 billion towards childcare and a renewed focus on assisting lower and middle income families, this confidence is only set to climb higher as families enjoy a slight reprieve in their everyday cost of living. 

This confidence is also exceptional news for the home owners as we are likely to see a lot more growth and movement in the market when it comes to people upgrading to bigger real estate and purchasing more investment properties.

INVESTORS

On budget eve investors all around the country sat with baited breath with whispers of ‘huge, detrimental changes to negative gearing and depreciation’ rife across media portals.  There were in fact no changes to these areas, nor to the use of self managed super funds investing in property so it was a definite win for the 1.9 million investors in Australia.  We are also likely to see those who have been perhaps holding off purchasing more investment properties in lieu of the ‘what ifs’ around the budget, so the investment market is set for a strong period ahead.

FIRST HOME BUYERS

Those looking to buy their first home this year potentially could be not so thrilled when it comes to this budget.  In 2014 we saw the First Home Saver Account scheme cut (which was designed to help first home buyers save for their deposit sooner) and also further cuts to the National Rental Affordability Scheme.

While this year many were hoping for reforms to encourage investment in new housing supply, and ease prices as our real estate markets continue to soar across our major capital cities, this was not the case.

The effect this could have on the property market is that rather than purchasing property, we are likely to see more tenants remain in the rental market.  While this may not be joyous news to young Australians hoping to purchase their first home it does mean good news for investors as vacancy numbers are likely to decrease.

Hannah Schuhmann

HS Brisbane Property Pty Ltd

Ph: 07 3254 0888

Email:  sales@hsbrisbaneproperty.com.au

We keep hearing from industry experts and economic reports that the Brisbane real estate market is heading towards a boom. Well, the latest housing market data report continues to support this claim.  

Since mid-2013 the average gross rental yield across Australia’s capital cities (combined) has dipped from 4.3 per cent to 3.6 per cent. This drop is being felt in Melbourne and Sydney the most, as both cities head towards record lows at 3.3 per cent and 3.6 per cent respectively.

With Sydney now overpriced, Brisbane’s CBD is proving more and more promising for investors.

In fact, latest March figures show that Brisbane CBD apartment prices were up by 1.8 per cent in March alone and a massive 3 per cent over the last 12 months. Furthermore, the median price of CBD apartments for the quarter was $380,000 – again this was up by 2.1 per cent.*

Mr Lawless said that this data would have presented quite the challenge for the Reserve Bank when they deliberated over the latest interest rate settings.

“Despite the headwinds of soft labour markets, very low rental yields, increased oversight on lending conditions and heightened economic uncertainty, historically low mortgage rates appear to be adding a further stimulus to the housing market, albeit that stimulus is largely being felt in Sydney.”

So with a boom on the cards, the question that has been on every investors’ lips is: “Will Brisbane start to see an oversupply in the CBD unit market?” The answer is a definitive “no” according to lead real estate adviser Urbis.

Recent Urbis reports indicate that inner Brisbane is reaching new heights when it comes to apartment sales; with a record-breaking number of 1,500 sales in the December quarter and 1,400 in the September quarter – a number which hasn’t been seen since 2007.

Urbis’s Economic and Market Research Director, Mal Aikman, said that future supply was “not an issue” and that investors from Sydney and Melbourne were seeing value in Brisbane.

“Looking forward, what we find is that in the first and second quarters of 2015 there are about 5000 apartments for sale. At the current rate of demand, that would equate to a sales rate of about 4000 apartments. So demand is slightly behind, but not significantly, and we’re a long way from saying there’s an oversupply or a glut,” said Mr Aikman.

Following months of record sales and increasing median figures, now is the perfect time to invest in a Brisbane CBD apartment. For more information or to make an enquiry contact Hannah on 0419 782 133.

* http://www.corelogic.com.au/resources/pdf/indices/indices-release/2015-04-01-monthly-indices.pdf  

Do you know what was on the wish-list for most families and investors back in the Christmas of 1989?  Lower interest rates.  That year as we pushed into the 1990’s, the standard variable home loan rate sat at an alarmingly high 17 per cent.  To put that into perspective, at that rate on a $600K loan you would be paying over $2.4 million dollars in interest alone over 30 years, compared to just under $560K at a 5% variable rate you could receive in todays climate.

When the RBA handed down a further rate cut earlier this week, we saw the cash rate reduced by a further 25 basis points to a significantly low 2.0%.  This was met with a ferocious cheer by homeowners across Australia, but what does it actually mean for investors?

Low interest rates mean less money is needed to service a mortgage and less interest is paid.  As the cash rate lowers and loan repayments decrease, this can often result in banks calculating borrowers can service ‘larger loans’ and approval for investment loans can become more achievable – which is great news for savvy investors looking to make the most of the current climate and purchase a new investment property.

Low interest rates not only mean an increase in cash-flow for the average property owner, but they can actually improve capital gains as well.

“Since the housing market reached a recent low point in May last year we have seen dwelling values rise by 6.5% based on the RP Data – Rismark combined capital city index. That equates to a gross profit of around $30,000 for the average home owner”, said Tim Lawless of RP Data when discussing the recent movements across the country.

Something that should be brought to the attention of investors is how the latest cut will affect their position in terms of negative gearing and tax breaks.  If this is a strategy you use, now is a good time to contact your accountant or financial advisor to discuss how the lower rates could affect you, and what steps you should take to protect your investment as we move closer to EOFY.

All of the above can mean now more than ever is a great time to consider a new investment for your portfolio.  To discuss current opportunities contact Hannah today.

In last week’s newsletter we focused on how to maximise the return on your inner-city rental through solid communication and attracting quality tenants.  This week, we have decided to delve in and explore that latter point in a little more depth.

How to attract quality tenants is a common issue that we get asked about frequently from investors. Every landlord wants to attract A-list tenants who will treat their CBD property as if it were their very own, a tenant who will go above and beyond to maintain the property for you.

I once knew a girl who spent hundreds of (her own) dollars painting the inside of her city rental apartment – with permission from the landlord of course. Yes, those tenants do exist. The question is: how do you find them? To help answer this question, here are five useful tips to use when searching for respectful residents that stand the test of time:

1.     Buy in the right area

In short, quality areas attract quality tenants so the aim is to invest in unit complexes in a great location. When it comes to inner-city living we find the best locations are those central to popular amenities ie. within walking distance to public transport, cafes (access to good coffee is surprisingly high on the list for many when choosing a new home), restaurants and of course – where they work!

2.     Appeal to your target market

Understanding the target market suited to your investment is key in helping to attract and retain tenants long-term.  Ultimately, you want to ensure your property suits the lifestyle of the tenant you wish to attract! This is one of the reasons we assist many investors to purchase great apartments in the CBD, as these units are very attractive to young professionals working in the city and increases the likeliness of ‘long-term’ tenancies.

Ensure the property is well presented and desirable

When you walk around your apartment ask yourself, “Is this somewhere I would want to live?” If the answer is “yes” then you are halfway there. If things are broken or not in working order it is always in your best interest to fix them before starting the search for a quality tenant.

Don’t skip reference checks

When assessing prospective tenants, reference checks are your ticket to finding out all you need to know about your tenant’s rental history. A comprehensive reference check can help you to gauge a good understanding on the following:

Do they move around a lot?

Do they pay their rent on time?

Are they good communicators?

Look after your tenants

Once you find an A-list tenant or tenants, the key is to ensure they stick around. The longer they stay, the less time you need to spend looking for the next adequate suitor. The best way to do this is to look after your tenants. If you do the right thing by them (making sure everything is in working order and requests are followed up promptly) then in turn you are likely to find the level of respect is returned and they will treat the property as if it were their own.

To discuss how you can benefit from investment opportunities in some of the Brisbane’s top CBD locations, contact Hannah today on 0419 782 133.