From 9k Per Month To 25k Per Month
Renovation advise To My Cousin
Hi guys... This will be my very first article for Savvy Property Solutions BLOG and how it came about. My friend and partner has been prompting me for a while now to start writing something for our website. My wife on the other hand, has been telling me to write a book. It might just be, that this BLOG will lead to a bestseller 🙏
So, this past couple of weeks I have been advising my cousin on a property he bought. At first he asked me to do the rental for him but due to circumstances I could not do it for him but I offered to advise and guide him on how to do it the right way.
On the couple of occasions that we walked through the property, my creative juices started to flow and the ideas just kept on coming. I told him: "Cousin, I see a lot of money here!"
His initial idea was to rent to a single family but he also considered using it as a guesthouse or maybe an Air BnB.
On the occasions that I visited him, I listened to him and his son and like in most cases, the ordinary person that start out investing in property has a very limited knowledge on the subject.
You must be thinking, "Hey Darryl, get on with it. Give us the juicy bits. How did you get from 9k per month to 25k per month?"
Right, here it is...
My suggestion to him was to use a multi - let strategy instead of the single family approach and although the renovation will cost him more, he will earn almost three times what he would've earned, because now he can charge per room!
With a multi - let you rent out the rooms to individual young professionals. A major advantage with this strategy, unlike with the single family strategy, is that if one tenant leaves, you still have the other tenants paying rent. If it was a single family and they left, your property will be vacant for a month or two leaving you with no income.
He would have rented the entire house to a single family for R9 000 per month but if he renovated smartly he could rent the individual rooms depending on the size, for R5 000 per room per month (rental amount determined after thorough research). Some rooms are bigger than others and would obviously cost more. With 5 rooms at R5 000 per room, he can now potentially earn R25 000 per month!
4 Useful Tips For Property Renovation:
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Always do your homework on the property - thorough due diligence
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Keep cost of renovation vs potential income in mind when considering your strategy.
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Have an Exit Strategy / 2nd option.
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Most importantly, do your calculations before you invest a single cent.
If you are starting out and want to do it correctly, then have a look at our Services by clicking on the following link: https://savvypropertysolutions.co.za/services/consulting
