A renovate to rent case study

Imagine turning a dated Sydney home into a property worth $1 million more.

Well, I did exactly that in Chatswood NSW after a 13 week renovation.

Curious to know more? And maybe something you can achieve on your own property? Here’s how it happened.

The Property

Location: Chatswood NSW on a residential street within walking distance to Chatswood Chase, the Westfield and the train station.

The home itself: a 4 bedroom, 1 bath semi. The home had been extended at one point, likely in the 1960’s or 70s. The owners lived in the home at one time but now rent it out after moving to the Gold Coast.

The challenge: The home was very dated with a kitchen with green benchtops and discoloured vinyl flooring. The only bathroom had peach tiles and the laundry room’s flooring was even older – likely original. There was no cooling which was a challenge in attracting tenants.

The goal: Increase the home’s valuation to leverage the added equity for more investments (long term). In the short term, increase the weekly rent and attract more tenants.

A note about renovating to rent: this is more of a long term strategy than short term. After all, it will take some time to recoup the renovation costs. However, if you can consider that this might buy you another investment property, this can fuel a huge property portfolio. You can keep applying this same strategy over and over (this is called the BRRRR method).

Pre-renovation value: $2.5 million

The great location, heritage semi and 4 bedrooms were a big tick for its value. What brought it down was mostly the condition, only 1 bathroom and the lack of cooling.

The Strategy

From my in-depth market research, it was clear we needed to focus on a few key areas:

• The condition of the kitchen and existing bathroom
• Add a second bathroom
• Install cooling

We also considered more extensive renovations like redoing the extension to have higher ceilings and a more modern feel, or even to add a second storey.

When looking at current build costs though, the ROI wasn’t there to do an extension or a second storey addition. Plus, no other homes on the street have a second storey so there’s a good chance this wouldn’t be approved by council.

Here’s a big tip: before you do any major work, do market research! You might find that the return on investment isn’t there and there are other ways to add value.

For example, my market research showed a few important things that guided our renovations – ensuite vs. no ensuite and split vs. ducted cooling.

Ensuite vs. No Ensuite

When I did my market research, I found no major differences in value between homes that had an ensuite or simply had 2 bathrooms.

And in our case, it wasn’t an easy solution to add an ensuite.

The existing bathroom was next to a bedroom, however it was the smallest bedroom in the home. Why address one objection just to create another?

It would also involve creating a doorway in a brick wall (the home’s original back wall), which would mean added costs.

Ok, but what if we added the second bathroom next to one of the larger bedrooms?

Well, you’d either be taking out a bedroom (and needing to find another place for a 4th bedroom) OR this would involve a major reconfiguration of the home which means an architect, council, and lots of money.

All to be worth the same amount at the end.

So instead we opted to add a bathroom to the laundry room. It ticks the box of two bathrooms, is the most cost effective, and adds the same amount of value.

Split vs. Ducted Cooling

The next debate was whether to install split units or ducted cooling throughout.

Again, looking at the comparable sales, there was no difference in value between the cooling options.

So we opted for split units in the living room and main bedroom, and ceiling fans in other key areas.

This is actually what I’ve found in most areas of Sydney. However, if you’re renovating for yourself it may be a matter or personal comfort – and that’s ok!

Kitchen Renovation

The kitchen obviously needed an update.

From the outdated green benchtop to the falling apart cabinets to the warped vinyl flooring.

One of the most cost effective ways to renovate a kitchen is to keep plumbing and electrical where they are. So that’s why we essentially kept the same layout.

The only major change was moving the fridge closer to the living room so someone can be cooking and family members can access the fridge from the living room without getting in their way.

We also got rid of the peninsula island which was just in the way and didn’t really provide much more practical use.

We opted for modular cabinets from IKEA.

This was to save money but more importantly, time. The previous tenants ended up breaking their lease early, which meant we didn’t have time to build custom joinery. Every vacant week means income lost.

We used white shaker style cabinets on the lowers and oak on the uppers and pantry (contrast makes it look more high end).

We used a marble-look laminate for the benchtop. When renovating to rent, consider durability for tenants. If the goal was to sell, then we probably would have gone with a porcelain or stone benchtop.

Other upgrades include this gorgeous white double farmhouse sink and under cabinet lighting (all from IKEA!)

And finally, the splashback tiles were a money win.

I found these TileCloud tiles for FREE on Facebook Marketplace. Tip: if you need tiles for a small area (like a splashback) look on Marketplace for renovators getting rid of leftover tiles. In this case, a joinery company just wanted them gone!

A note about the design: because it’s a 1910 heritage semi, we wanted the design to be a nod to the home’s time period. With original details like ceiling roses and fireplaces, we wanted to home to feel cohesive. That’s why we went with the colours and styles that we did.

Bathroom 1

The existing bathroom was outdated and had a pokey layout.

While a separate bathtub and shower can be ideal, unfortunately the space felt cramped. Plus, the vanity on the right felt in the way.

In the renovation, we opted for a shower over the bath so that we could move the vanity to the previous shower’s position. We kept all plumbing in the same position to save on costs.

In the end, we have a more cohesive layout with the vanity as the hero piece.

Tiles were from Beaumont Tiles and all tapware and accessories are Nero Tapware in Brushed Gold. LED mirror is from MyHomeware (and might look familiar if you’ve seen my Sandringham renovation!).

Bathroom 2 / Laundry

One of the largest value adds was adding a second bathroom in the laundry.

The previous space was underutilised with machines and joinery on one wall, and then essentially a large open space for storage.

This was the most cost effective place to add a bathroom. We already had plumbing from the laundry (and an outside tap on the vanity wall), plus an outdoor toilet so we added a toilet by tapping into the same sewage and plumbing lines).

We did need to brick up one window in order to meet waterproofing standards, however we were able to repurpose it into a shower niche.

On the other side, we enclosed the toilet with a sliding door and created a laundry cupboard with bifold doors.

While the new bathroom and laundry has lots of zones, it still feels like a very large space with high ceilings and good lighting.

And the outdoor toilet? We gave that a little cosmetic refresh too to make the now third toilet more inviting.

Other Projects

When we removed the vinyl flooring in the kitchen, we discovered original timber floors. Our original plan was to tile and we opted to refinish the floors instead, which meant all of the floors in the home were refinished.

We also changed the lighting in the living room – the pendant and replacing the fluro light strip with LED.

We also painted the exterior of the home. This is by far the best ROI you can do for your home.

Finally, I styled the property for professional photos to get the property listed on the rental market.

The Results

Post-renovation, the valuation came at $3.5 million.

With a pre-renovated value of $2.5 million, that means there was a $1 million uplift in just 13 weeks!

Total renovation spend was just under $200,000, meaning the homeowners made an $800,000 profit. They were in the Gold Coast the whole time and I project managed the renovation, meaning they made money without doing any work.

From the homeowners:

Project management skills were amazing and attention to detail. Clear communication. Strong network of trades and certifiers and understanding of the rules. Good recommendations on fixtures and fittings. Went above and beyond to get the project finished to a high standard within a managed budget.

Keys takeaways for other homeowners

This case study doesn’t have to be a one-off. You might be able to achieve similar (or even better!) results.

Here are my tips:

• Renovations don’t have to be massive to be transformative. Local research is key. You might find condition and features matter more than huge, expensive works.
• The right strategy can add six or seven figures to your property’s value. In this project, I actually edited the clients more than doing actual work. There are always more projects to be done but the key is, what’s the best strategy and what will get you an ROI?
• Consider the long term effects if you’re not ready to sell. Whether it’s an investment property and you want to buy another, or even your own family home that can be worth more and help you build wealth, renovating for an increased valuation can be a smart strategy.

Curious about what results you could get with your property? Schedule a consultation today and let’s talk.