How to double the rent in 18 days
Property investment coach Ilse Wolfe says a quick turnaround is possible, but a clear plan is vital to success.
1 July 2022
The popularity of a recent webinar prompts this coverage of the success factors required to help investors improve the income potential of existing build rentals.
The Buy, Renovate, Rent, Refinance, Repeat (BRRRR) strategy is how renovation-focused property investors accelerate growth, but there are certain things you can do in order to double your rental return even quicker.
Ilse Wolfe, of Opes Accelerate, says she recently worked with an investor who was able to use $50,000 to transform a two-bed standalone house into a five-bed social housing rental in Whangarei.
The rent doubled from $350 to $695 a week, and the overall value increased by $159,000.
And all this was achieved in a mere 18 days.
Here are some of Wolfe’s pointers to how this quick turnaround was achieved.
A clear plan from day one usually means you’re more likely to be successful, she says.
“Investors need to have a clear objective about what property, what location, and what tenants are going to be renting.
“It’s all about quantifying the final outcome and the rent before actually signing up to the purchase.
“Everything else you want to have assessed, and seen coming,” she says.
The Best Ally
A property manager is going to be your No. 1 ally when completing any successful BRRRR project, Wolfe says.
“The very nature of the BRRRR strategy is getting as much certainty as possible, before committing.”
Ideally, the only surprises you want to find in your BRRRR project is something you can’t foresee. “Like problems within the framing of the walls, for example.”
A great property manager is going to scope out what the final forecasted rent will be, which will give the investor confidence to purchase.
“Our property manager relationships are like needles in a haystack. Not only do they visualise the renovated rental, they will be the first team member on site measuring up room sizes for our remote clients.”
Buying a custom-built cabin and erecting it in the back yard can be a way of increasing the bedroom count without having to wade through council consent.
Wolfe says not only does this cut back on dollars for the build and paperwork, but it also removes time spent waiting for building consent to be approved.
“A two-bedroom extension to a house can take up to three months to approve, can cost between $80K and $100K, and then up to another three month build process, whereas a Healthy Homes certified cabin can be turned around in 5 weeks, and cost somewhere between 19K and 35K.”
While the cost of fixtures is relatively cheap when you’re bargain bin hunting, labour required to install can be expensive.
“The fixtures on your door hinges can cost you $1000 in labour,” Wolfe says.
This means if you do as much of the work yourself — by installing the door handles and tiling your own bathroom you can save yourself thousands and have a high impact.
This is where investing in your own city can be of an extra benefit to your project, because you are close enough to invest your own “sweat equity” and you can get your friends and family to help out too.
Wolfe admits this isn’t possible for everyone, but where possible it can be a big help.
A big part of buying well is buying future potential.
While adding a bedroom adds value and income to a house, Wolfe says when you bank future land development opportunity you can potentially add more value down the line.
“You don’t get that with new builds because the developer has already maximised the land potential,” she says.
The bottom line is to find the right balance of location, budget and skills to help you achieve your goals.
While an 18-day outcome won’t be possible for everyone, this is what can be achieved with a clear plan, investment in your own city, and help from skilled family and friends.
“It’s not about the 18 days,” Wolfe says. “It’s about fast-tracking outcomes by having a clear plan, using your strengths and making the property work to your advantage.”