Property Investment 101: 6 Reasons for Buying Renovated Units

Property Investment 101: 6 Reasons for Buying Renovated Units

There’s always the first time

My first investment / property buy was a partially renovated unit. The owner wanted to sell and move to the first floor of his new shophouse. I wanted to buy versus renting a place. I was getting married and my father-in-law reminded me to OWN a unit versus renting. That was way back in the year 2002. By buying a partially renovated unit, I saved a lot of money. Of course, I must also be willing to accept all that has been done yeah.

The total renovation money I spent in 2002 was just RM15,000. This included an extension for the bathroom because the original master-room bathroom was just too small. I stayed in this unit for close to 6 years. So, the renovation if RM15,000 was value for money. Many years later, I sold the unit with an appreciation of slightly over RM100,000. The reason people prefer my unit? Most other units, their bathroom was small while mine was extended…

#1 – Savings from spending more money

As you can see above, even with a partially renovated unit, I saved a lot. My 3rd property was a fully renovated unit in Kelana Jaya. For this unit, I saved at least RM50,000 for the kitchen cabinets and also the master-room built-in wardrobe too. Plus the owner has built the TV cabinet and even left the sofa unit which was still in good condition. If I have to spend RM50,000 or higher, it would have made me poorer but because I bought a renovated unit, I did not need to spend my own money.

#2 – Move in quickly / immediately! (saves time)

A renovated unit meant we can move in almost immediately. Okay, perhaps not in a few days but still very quickly. Remember, when we need to do renovation, we would also need to allocate at least 45-60 days because we need to find right vendor, engage the vendor, review the vendor’s work, give time to the vendor and even potential rectifications if there were some delivery which were not up to our satisfaction. So, 45-60 days is really the most conservative possible and could easily be far longer yeah.

#3 – Savings from effort, hassle and stress

While I like to do things myself versus just leaving everything to a master contractor, the truth is, if I were to do it myself, then I would have to spend considerable effort, hassle and potentially stress over the whole project too. For example, maybe the vendor’s timing does not fit our timing. Maybe the vendor we chose was not up to our expectations and we needed to find another one.

Maybe the vendor’s great with presentation but when it came to delivery, they did not live up to what they promised. Thus, the question is this, do we really need the additional stress? If this unit is for investment purpose, maybe think again. If it’s for own stay and we are someone who is very particular, then yea, take up the effort, hassle and stress yeah. Maybe it’s worth it since we will stay in the same property for a very long time.

#4 – Better Value from the price we pay

We can buy an empty / un-renovated unit or we could buy a renovated unit. When we buy an empty unit without any renovation, we will need to spend for renovation. When we buy a unit with renovation, the owner could not price in the renovation in full. For example, market price for the unit is RM500,000 and the renovation was RM250,000. The owner may be able to sell higher than the market price of RM500,000 but will not be able to sell at RM750,000 yeah. In other words, the price we pay would be lower than the value we get. This is why when we renovate and we spend big amounts, please do not think that whatever we pay could be included into the final property price yeah.

#5 – What we buy is really what we get

Too often, how we explain what we needed for the renovation will be amazing. Well, the artist impression on the proposed renovation may also look extremely satisfying. The final work may just be satisfactory. Yet, it’s too late to do anything because satisfactory already meant that the renovation has met the minimum expectations.

Meanwhile, if we bought a unit which has been renovated. We can already see how the renovation looks like. What we buy is really what we actually get.

#6 – Higher rental potential vs empty unit

When we buy an empty unit, the rental we get will be for a basic unit. The competition for basic, empty units would also be higher, not to mention the targeted group would be different too. When we buy a renovated unit, we just need to furnish it with some electrical goods and we can already rent it out with a higher rental versus an empty unit. The target group would also be the ones who want higher comfort and could pay for them too.

Happy deciding!

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