In the world of property investing it is sometimes necessary to think outside the square in order to get the returns you need. One of the easy ways to do this is to add extra bedrooms within the footprint of an existing dwelling.
Quite simply, extra bedrooms equals more rent. By working within the footprint, it is just a matter of adding the necessary non-load-bearing internal walls. Properties with very large bedrooms or living areas are perfect for this strategy.
An example that used a bit of lateral thinking is my own property to which I added a minor dwelling unit. Although I don’t normally like this sort of project because it’s not my intention to become a developer, in this case it was well worth my while to add value in this way. It’s a good example, I think, of looking outside the square in order to maximise the long-term capital gain my wife Maureen and I would get.
Most Minor Dwelling Units or “MDUs” are a maximum of 65 sq m in size. However, after undertaking a substantial amount of research with the council I discovered I could build the MDU at 80 sqm simply by having it permitted as visitor accommodation, which we could rent out by the night. Further down the track, when we come to sell the property we can market it as having a permanent business attached (notwithstanding that we haven’t been running it as such), which will greatly increase the price. Because our property is in a popular tourist and holidaymaker area the MDU could easily be rented out for $150 per night. In the meantime, I rent it to long term tenants who pay me good rent because of its substantial size.
The above post is based on the book “The 15 Million Dollar Man” by Sean Wood, to read more click Property Investment and download 2 free chapters.
|For further reading on Property Investment NZ, click on the articles below:
Setting Goals for Financial Independence – click here
Tips for Becoming a Property Expert – click here
Buying Rules for Property Investment – click here
5 Tips to Add Value through Renovation – click here