A property that has been completed for more than 3 years is generally considered a mature property. After more than 3 years has passed, the condition of the property is no longer new, and this includes exterior, interior, and facilities. As a result, property owners may face these 2 problems:
a. Decrease in rental value due to aging (unfortunately houses don’t work like antiques)
Just like a car being worn down by age, the rental value of a property drops because there is higher maintenance cost and it just doesn’t look as good as it once was.
b. Competition from neighbouring developments (who say you can block my view?)
People generally like new things, therefore a new development built near a mature property is likely to attract higher demand, causing the rental rate of the mature property to drop.
This is a classic scenario that is caused by supply and demand.
SOLUTION – How does a makeover help?
Firstly, a makeover is needed if the property has been empty for a few months, or simply cannot be rented out at all. While you, as the property investor, wait to secure tenants, your monthly installments to the bank still have to be paid on time.
A makeover can help increase rental value and speed up the rental process. While viewing your property, despite it being old, new interiors would instantly ‘wow’ potential tenants and win over their hearts.
Similar to an aged property, new properties also pose unique challenges to homeowners. As a common practice, developers release completed units via a process called VP (vacant possession). VP is normally done in entire housing blocks which could range from a few hundred to a thousand units at once. This process presents 2 different problems as below:
c. All units look the same (House this different from that?)
When a property first goes through VP, all (if not most) units are unfurnished and bare. By leaving your property empty and putting it up for rent, you are competing with other bare or partially-furnished units in your block.
A makeover will help you stand out amongst the competition, as you’re one of the few providing a fully-furnished property to potential tenants. Furthermore, well-to-do tenants typically look for fully-furnished units in order to reduce their move-in hassle.
d. Sudden surge of supply in the rental market. (Houses….houses everywhere)
Because you are receiving keys to your unit at the same time as other owners, whichever unit gets their property rental-ready the quickest shall face significantly lower competition in securing their first tenant.
Note: Normally, property owners go through a ‘defect check’ process and would partially furnish their property before renting it out.
Not only that, but less competition increases your chances of a higher rental rate. When supply is abundant, tenants have more options to choose from which consequently reduces forces rental rates down.
In conclusion, a makeover can help your property’s cash flow by giving you a competitive advantage.
Our services are designed to help solve rental issues in the property market. We do this by providing beautiful interiors and proposing a rental strategy based on tenant profile research.
Also, allow us to clear up a common misconception – lots of people ask if we are an interior designer firm. No we are not, because our makeovers are not customisable. We focus on helping property owners save cost and get their unit rented out in as little time as possible. If you’re a property investor in need, drop a message on Facebook!