What’s the best return for your $20k? If you have an existing property portfolio I suggest some simple cosmetic work to increase the value of your
properties.

$20K doesn’t seem like much but it can go a long way if you are prepared to chip in some elbow-grease. Added bonus? If you go about it cleverly, you
could achieve a good return in a multitude of ways:

  1. Capital gain – A wise man once told me that for every $1 spent on improving the property, I should be gunning for a $2 return. So we are looking
    at $40K from a $20K spend. But that’s not it. You could also extract that out of the improved property for further growth. For example, if
    you had a property worth $500k with $350k lending against it (70% LVR) and renovated it with your $20k in cash following the rules above you’d
    have a completed value of $540k. If you topped this property up to 70% of the completed value you could release $28k ($378k is 70% of $540k,
    and your current debt is only $350k, so the top-up is the difference). This means you end up with a more valuable property, have your $20K
    back and another $8K on top. Not bad!
  2. Rent yield – Some cosmetic work (for example, new carpets, painting and simple landscaping) can add value and increase a property’s rentability.
    If you increase the rent by $20-$30 per week this might be another 5-7% in your pocket based on the original spend of $20k.
  3. Less ongoing maintenance costs – Sometimes doing work to the property earlier may mean that you reduce the amount of work that is required in the
    future for maintenance. Looking...