Minimal spend for maximum result
Recently, a landlord added an estimated $25,000 of worth to their property by constructing a simple, cost effective wall.
A two bedroom property was turned into a three bedroom property with just a bit of gyprock, timber framework, paint and labour.
“The added value is based on comparative sales with other three-bedroom and four-bedroom properties,” explains the real estate agent who worked with Smart Property Investment editor Philip Tarrant during the publication’s Investment in Action series.
Investors looking to try this method should bear in mind that not every room addition will be profitable, and making other rooms cramped can be detrimental.
“For example, let’s say you have a room that is four metres by five metres, you would never go in and chop that bedroom in two by adding a wall as it would produce two small rooms that are four metres long but only two and a half metres wide,” says Renovating for Profit’s Cherie Barber.
“For bedrooms you want rooms to be, at the very minimum, eight to nine square metres, three by three metres, as anything below this size is starting to become too small and impractical,” she says.
Given there are no structural elements to consider when erecting a wall to split a room in two, if you are handy with tools it is possible to throw up a timber or steel frame wall yourself.
It may, however, be best left to professionals – particularly as it may not be that expensive.
“If you do want to install a non-load bearing wall a carpenter is all you need and it should only take them a couple of hours to knock up a timber stud wall, for example, given the bulk of Australian councils don’t require approval for internal works, such as adding a wall,” she says.
“To install a four metre wall your carpentry labour costs combined with all material expenses, such as timber, plasterboard and skirting board, should amount to roughly $1,000 in total charges,’’ she says.
In inner city areas of Sydney, for instance, another bedroom could potentially add many tens of thousands of dollars in worth, while in outlying suburbs, other cities or regional areas, the added worth will be less.
Figuring out how your property will perform with this addition is crucial, and investors will want to source real estate agents’ opinions ahead of time.
Reno Kings’ Paul Eslick also says that this is one of his favourite value-adding strategies, and while it’s particularly easier with older properties that typically have larger spaces available for changing, there are some properties where it becomes more difficult.
He warns that, if it’s a unit, “then changing it from a one-bedroom to two-bedroom means advising the body corporate and going through all the permission to do that.”
Quick Ways to Work Out if it’s Feasible
• Identify any L-shaped rooms that can be turned into two smaller rooms
• See if that “office” is actually large enough to fit building code requirements for a bedroom
• Masking tape along the floor where the potential wall line will be. If you still can’t get an idea of how the room will look, consider putting furniture into the space allotted or masking tape out where furniture will be.