Renovations in Preparation for Property Price Increases
Is it time to do some renovations on an existing property and prepare for the property price increases?
If you have some spare dollars but don’t feel like taking on more debt by purchasing another property at the moment there is another option to increasing your property capital.
A good long term strategy for your property portfolio would be to do any additions that you may have been thinking about. In other words, if you were thinking of replacing a cracked or broken driveway, or adding a new deck or patio cover to an investment property, now might be the time to do it.
Why?
Well if you increase your property value now by say $20,000, then when prices start moving up again you will not only have the $20,000 capital increase, but you will also get the % increase on the $20,000 in value. So if prices increase by 10%, you will have approximately $22,000 extra equity that you can borrow against when the economy has settled down.
By spending this money you should also get a higher rent for the property.
Even if you put the additions on a credit card, you will come out in front.
- You will be able to charge the interest against your tax
- Your increased rental will meet the monthly credit payment
It is a win/win situation.
Filed Under: Investment Strategies • Renovations
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