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

If you’re in the market to sell your home, you want to make the most money possible. And while a complete home renovation may be time-consuming and expensive, there are often smaller, more affordable changes you can make that will still get a big return on investment.

Let’s take a look at a case study using the recent sale of a unit in Manly. The vendors missed out on up to $800,000 in profits simply because they didn’t spend $80,000 on renovations that could have boosted their property’s value.

In this blog post, I’ll explore what they could have done differently and share some design ideas to help you make the most of your own home sale.

The Details

Since I wasn’t involved in the sale and the property has since sold, I’ll leave out some identifying details. But I will give you some of the basics.

Location: Manly, Australia (Sydney area) on the ocean side within walking distance to the beach, Corso and easy ferry access

Property Type: Unit

2 bedrooms + sunroom

1 Bath

1 Car Garage

Ocean views

Sold for $2.5 million in February 2023

The Renovation

The unit has a lot of great things going for it, including the size and the views, which always attracts a higher price.

However, the kitchen and bathrooms are slightly outdated.

Here’s what I would do if Wealth House took this on as a project:

• New flooring
• New paint throughout
• New blinds
• New lighting
• Open wall to living/dining (pending strata approval & cost)
• Resurface kitchen
• Resurface bathroom

When I say resurface, I mean that the main items like the cabinets are in good condition. They just need a cosmetic update like a new benchtop, splashback and hardware.

The preliminary budget (which is fairly conservation) would be at $80,000 with a $12,000 contingency. Work would take roughly 4 weeks to complete.

We’d get preliminary quotes from builders in and general material estimates but make final selections and engage a builder once the services agreement is signed.

Comparable Sales

It’s really important to look at comparable sales – both for the current condition and the potential post-renovation. This also gives me an idea of the style in the area.

Here’s some comparable sales for the post-renovation:

• 4/62 North Steyne, Manly sold for $3,150,000 in September 2022. The views are better and there’s an outdoor space but the condition isn’t as nice as the subject property will be.
• 3/114 North Steyne, Manly sold for $3,100,000 in September 2022. It’s a similar sized unit and it has an outdoor space. However, it’s on a lower floor so the ocean views aren’t as good. The condition of the kitchen & bathroom of the subject property will be better though.
• 1/51 Ashburner Street, Manly sold for $3,400,000 in March 2022. It’s in a very similar condition of what the subject property will be post-renovation and has a similar view.

The Design

While I’m not going to give away all my secrets for free, here’s a little mood board to get an idea of where the design would be going.

As you can see, I’m going for a modern Art Deco vibe. I chose this as a nod to the era the building was built and to go along with some of the features that are already in the unit.

Some of these Art Deco elements include the lighting, hex tile (also known as honeycomb tile) and gold accents.

However, we’re bringing it to 2023 with not only our modern take on Art Deco, but some of the more trendy finishes like black hardware and open shelving in the kitchen. Plus, since the unit is located at the beach, we want to keep it light and bright.

Estimated Results

Ok, here’s the fun part.

Now that we have an idea of what the unit will look like the end, and comparing it to the comparable sales, my estimated price guide is $3,000,000-3,400,000.

That’s a $500,000-900,000 uplift in just 4 weeks.

Mind. Blown.

With an all in budget of $92,000 that’s at least $400,000 in profits. I’d say that’s a great return on investment.

Want similar results?

If you’re reading this blog post and considering renovating your own property before selling, you may be wondering if you’ll get a return on investment.

The good news is, you just might. As a pre-sale renovation specialist, my company specializes in helping sellers like you get the most value out of their property.

Not only that, I offer a unique renovate now, pay later program that allows you to complete the renovations you need without any upfront costs due until settlement.

So, if you’re considering renovating your property but aren’t sure where to start, I’m here to help. Get started by scheduling a free consultation today.

Conclusion

In conclusion, the recent sale of a unit in Manly, Australia serves as a great example of how a few simple renovations can go a long way in boosting the value of your property.

By investing $80,000 in updates and design improvements, the vendors could have potentially made an additional $400,000+ in profit.

By focusing on changes that would have made the property more functional, modern, and visually appealing, such as updating the kitchen and bathroom, painting, and improving the lighting, the vendors could have attracted more potential buyers and commanded a higher sale price.

If you’re looking to sell your own property in the Sydney area and want to get the most value out of it, consider working with a professional pre-sale renovation company like Wealth House. My renovate now, pay later program makes it easy to make the necessary improvements to your property without any upfront costs. With my help, you can maximize your sale price and achieve the best possible return on investment.

Please note that results are not guaranteed. This is an estimate ONLY based on the preliminary budget & current market. Trade quotes, building material cost variations, and market shifts may occur and ultimately the buyer will determine the final sales outcome.