Is This The Perfect Time To Upgrade And Renovate?

It’s been a whirlwind past month or so with millions of people's incomes heavily impacted by the pandemic crisis.

For our short-term managers this is especially so, with occupancy rates for many complexes dropping into single digits in the space of a few weeks.

With this in mind, we thought we’d share some feedback and advice from some of the most experienced accommodation operators in our network who are using this ‘down time’ to their advantage. After all, why not try to improve your business while riding out the next six months with the help of the government stimulus packages.

The two key suggestions are 1. Spruce up your property with a cleaning and upgrade program on the units in your letting pool 2. Take it one step further and carry out more major works like pool, spa and sun deck refurbishment, by engaging with the BC committee to dip into your sinking fund.

• Offer 'spring cleans' of units in the letting pool to the owners, especially if you have your cleaners’ wages are being covered by JobKeeper.
• Encourage owners to take advantage of the quiet trading period to update, renovate and improve their unit’s presentation so they are best placed when the bounce back occurs.
• Where possible, show owners photos, testimonials and examples of where upgrade work has been beneficial in the past.
• Offer to style the units and arrange refurbishment with no project management fee (usually 10%).
• Encourage owners to take up interest free offers such as offered by Amart or Harvey Norman (ie offering 60 months interest free).
• Support local tradies and get quotes for renovation and upgrade work.

As we move into traditionally quieter months, the message for your investors is "now is your chance to make the most of this opportunity to improve the overall offering of your unit".

• Engage with your BC committee to dip into the sinking funds to carry out some common property upgrade work.
• This is especially relevant for older complexes that are generally in greater need of an upgrade, and have larger sinking fund balances.
• Now is a great time to upgrade pool areas with new tiling, improve sun deck areas and BBQ facilities, or maybe install a new jacuzzi.
• In the current climate, you may well get some really good rates on the work, especially if you obtain multiple quotes from tradies.
• Strive to get your complex in the best shape and as attractive as possible for when the travel bans and restrictions are lifted and domestic tourism starts to surge.
• Use social media to let everyone know you are making big improvements and that you look forward to welcoming them back. Post photos and respond to feedback.

By way of example, one of the industry’s most experienced short-term operators – Michael Tozer of Collective Hotel Management – is already well advanced with upgrade work at Tingirana on Hastings Street, Noosa. He is also is in advanced discussion with the committee at On the Beach (also on Hastings St) to commence common area work there.

He’s been providing detailed and regular updates, along with photos, to his committee via email. Here’s an example email to his committee, detailing some of the recent work:

• Stainless tiles edging (external passages).
• Removed 2 gates and oxidized and respray - $200 each gate only - look like new.
• Apartment door closers - as the quote to replace 36 apartment door closers was close to $10,000 - we are removing and sanding and painting the actual closer & plastic clips - cost nil!
• Re-staining ALL sun lounges - nil cost.
• Kitchen scotia edging - doing these in most apartments - join between floor and kitchen cabinetry - scotia cost to sinking fund approx. $500 - labour nil.

Plenty of other works also going on, will keep you posted.

None of us know when all the restrictions will be lifted. Deputy Chief Medical Officer Paul Kelly has said we may not need to wait the six months that Prime Minister Scott Morrison has spoken about.

If the travel bans are lifted early, will you be ready?