Maximizing Returns: How much value a $70,000 unit renovation could have added to a recently sold property

Case Study

November 15, 2023

Sandringham
Renovations
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I'm Kristen Jackson
Case studies
Concept board for a Manly unit renovation that with an $80,000 investment would increase the sales price by up to $600,000 more

A Case Study in the Return on Investment of Pre-Sale Renovations

As a pre-sale renovation specialist, I’m always keeping my eye on the market – especially when I see a property listed that I see has some renovation potential.

Even if it’s a small unit renovation, I’m often curious. Are the vendors (and real estate agent) potentially missing out on some added value?

That’s why I’m always running feasibility studies. I’ve decided to start sharing more of my findings to help open people’s minds to pre-sale renovations because it is still an emerging market and many people don’t think of them.

So let’s take a look at a recent sale of a Manly unit and where I think the vendors could have added value with a unit renovation.

The Details

Location: Manly (Sydney area) on the Eastern Hill. It’s a desirable area with higher elevation so many properties have views, plus it’s right in between the harbour and ocean parts of Manly so you’re never too far from the water.

Property Type: Unit

3 bedrooms, 2 baths + separate laundry and a 2 car garage

Sold for $1.660 million in June 2023

On paper, this unit is already a winner. With its bedroom count, 2 separate bathrooms and 2 car garage, this is a great property for a small family or a downsizing couple.

However, I don’t think the unit was presented in its best light and it missed some major opportunities for updates prior to coming on the market.

Why consider pre-sale renovations?

This property is an excellent candidate for pre-sale renovations, beyond the obvious return on investment.

By understanding the buyer and pinpointing that it’s likely going to be a small family or a downsizing couple, we can also understand that these types of buyers typically don’t want to undertake renovations after the purchase.

Families tend to be very busy, and living through a renovation with small kids is not ideal. For a downsizer, they’re likely moving to a unit for an easier lifestyle – and adding in a renovation project certainly does not make it easy.

As for the argument that the unit could be listed as-is considering everything is in reasonable condition, that’s also fine, however you’re limiting your buyer pool plus you’re missing out on an opportunity for emotional appeal.

Buyers are attracted to shiny and new, and of course pretty. And they pay more for that.

So therefore I think there’s a lot of value that can be added by making it more visually appealing and providing a move-in ready property.

Here’s what I would do for this unit renovation

The good news is that it’s a very straight forward all cosmetic renovation.

  • Fresh paint
  • New blinds
  • Update lighting fixtures
  • Resurface the kitchen (new benchtop, splashback, hardware and paint the tile floor)
  • Resurface bathrooms x2 (replace tile, new vanity, new tapware)
  • Resurface laundry room

The timeline for this unit renovation is about 6 weeks and the preliminary budget is $70,000 plus a 15% contingency.

Comparable Sales

Comparable sales are probably THE most important thing to look at when renovating before selling.

Why?

Because that is key data that can determine first that the renovation is feasible, and then how big you can go with your renovation.

I like to think of this as my secret weapon. Since my real estate agent days, I’ve always been spot on with my price opinions and I love how data can empower decisions.

So here’s some comparable sales I found after the unit renovation:

  • 9/6-12 Pacific Street, Manly sold for $2.4 million in September 2023. It’s a slightly larger unit, although only 2 bedrooms and one 1 car parking. It’s newly renovated with fresh flooring and paint and is presented very well.
  • 5/54 Hilltop Crescent, Fairlight sold for $2.075 million in August 2023. I like it as a comp because it’s nearly identical on paper – similar size, 3 bedrooms, 2 bathrooms, 2 car garage and even 2 balconies. It’s renovated in a beautiful style and it’s presented well. I do think the subject property has a better location though.
  • 4/10-12 Woods Parade, Fairlight sold for $2.3 million in July 2023. It’s a larger unit and there’s a side harbour view if you stand in the right spot, but otherwise on paper it’s pretty similar with 3 bedrooms, 2 bathrooms. There’s only 1 car spot and just 1 balcony (there’s 2 in the subject property). What I really like about this comp is that it’s clearly been renovated by an interior designer with some bold design choices which is clearly reflected in the price.

The Unit Renovation Design

Now, on the fun part – the vision.

Kitchen concept for the Manly unit renovation featuring green cabinets, white benchtops and a painted floor.

The current kitchen has basic white cabinets, a laminate benchtop and a dark tiled splashback. I definitely think we can add some character.

I would propose refacing the cabinets in a soft green colour like sage (and new hardware), replacing the benchtop and tiling the splashback with a white zellige tile.

As for the floor, it’s currently an orange-y/yellow tile with dark grout. I’d love to paint the floor in a pattern like the image on the right (above) – yes, that’s paint!

All the elements together, softens and brightens the kitchen, plus is on trend.

Bathrooms concepts for this Manly unit renovation featuring green tiles, terrazzo flooring and a timber vanity.

There are 2 bathrooms in this unit – one family bathroom with a built in bathtub and one ensuite with just a shower.

I would continue the green theme with some gorgeous green subway tiles. I like the cohesiveness for both bathrooms, however I think the family bathroom could have more green tiled walls and bathtub while the ensuite could potentially have just a feature in the shower (like image 2, above).

I also like pairing the green tiles with terrazzo flooring (like in image 1), a timber vanity, and lots of white to keep it really bright.

Fixtures and fittings concept including modern lighting and bright white paint.
Source: Paddington Terrazzo look tile from Tile Cloud, So Fresh and So Clean paint from Tint Paint, Jade Green tile from Tile Cloud, all lighting from Beacon Lighting, and painted tile inspiration from Domino

As for the rest of the unit, I would give it a fresh coat of bright white paint and update the lighting fixtures.

As you can see, it’s a fairly straightforward cosmetic renovation with high style to appeal to the market.

Estimated Results of the Unit Renovation

Now you can see the vision, let’s look at the numbers for this Manly unit renovation.

Estimated post renovation price guide is $2.1 million to $2.3 million.

Post unit renovation, my estimated price guide is $2.1 million – $2.3 million.

I’m pretty confident in this number based on the comps – it’s a slightly better location than the Fairlight unit which sold for $2.075 million and post-renovation quality similar to the Fairlight unit that sold for $2.3 million.

The only reason I didn’t say $2.4 million like the Manly comp is that one is much closer to the beach, although I do think we could aim for a similar result.

The all-in budget was $80,500 ($70,000 + 15% contingency) which leaves an estimated profit of $343,000 to $542,000.

That’s an incredible result for a roughly 6 week renovation.

Conclusion

It may be hard to believe that a $600,000+ uplift can be achieved in just 6 weeks, but the data doesn’t lie.

By analysing comparable properties and coming up with a design that will appeal to the ideal buyer, incredible results can be achieved – you just need to have the vision.

This is just one example of the kind of work Wealth House can do – and with a renovate now, pay at settlement program and full service (I handle everything!) there’s no reason why any home seller or real estate agent can’t use my services.

If you’re curious whether you can achieve similar results, simply schedule a free consultation.

I can analyse your property, run a feasibility study to see its potential and come up with a preliminary game plan.

If you’re interested in some other case studies, you can check out this North Manly house or this Manly unit.

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