When $170,000 could have netted the vendor a $700,000 profit

Welcome to this month’s case study featuring a potential North Manly pre-sale renovation. This example highlights a strategic pre-sale renovation that could have yielded a remarkable 5x return on investment. Amazing, right?

Let me show you how.

The Details

First things first, this is a hypothetical example, like the one I did last month. I was not involved in the sale and the property has since sold. Because of that, I’ll leave out some identifying details but give you some of the basics so you get a sense of the property.

Location: North Manly (Sydney area) on a corner block. It’s part of the Northern Beaches and the neighbourhood has lots of adorable homes with a beachy feel.

Property Type: House

4 bedrooms & 2 baths. The 4th bedroom is in a downstairs in-law unit with a second kitchen.

2 car garage

Sold for around $1.9 million in February 2023

The home is a sizable double brick family home in fairly good condition, just a bit outdated. It has a lot of great things going for it, which makes is a great candidate for pre-sale renovations.

The Pre-Sale Renovations

The good news is that all of the pre-sale renovations would be cosmetic. The home is in good condition and already boasts an open kitchen and living space. Because we’re looking at a house, the exterior of the home is also really important.

Curb appeal is key – it’s the first impression the buyer has of the home, and yes, it ultimately impacts the sales price.

Let’s start there. Here’s what I would do to the exterior for this North Manly pre-sale renovation:

• Paint the exterior
• Paint or whitewash the brick driveway
• Retile the exterior path
• Replace the balustrades & handrails
• Refresh the landscaping
• Replace the front door

It may seem like a lot, but it will greatly improve the overall impression of the home.

Now, let’s look at the interior:

• New flooring throughout
• New lighting throughout
• New blinds throughout
• New paint throughout
• Paint the upstairs kitchen cabinets and replace the hardware
• New appliances both kitchens
• Resurface both bathrooms
• New benchtop & hardware in the downstairs kitchen

Again, this is a long list but you’ll notice that there is no demolition required. For a budget (as well as sustainability) perspective, it doesn’t make sense to remove & replace anything major in the home. The joinery is in good condition and the layouts work well.

Because it’s all cosmetic, the timeline for this North Manly pre-sale renovation is 8 weeks. The preliminary budget is $120,000 for construction, $25,000 for landscaping, and a contingency of $21,750.

Comparable Sales

Comparable sales, also known as “comps,” are recent sales of similar properties in the same area that are used to determine the fair market value of a property. I like to run comparable sales for both the current condition, as well as the post-renovation condition. It’s also helpful to get design ideas and see what buyers in that price point are looking for.

Here are some comparable sales in North Manly for the post-renovation:

• 1 Oatway Parade sold for $2,525,000 in November 2022. It’s a similar size and has lots of the same features, including a second kitchen. They’ve done some renovations but the subject property will be in better condition.
• 2 Amourin Street sold for $2,325,000 in October 2022. It’s updated with a little more of a beachy feel, and also has a second kitchenette. It’s not a double storey though.
• 40 Thomas Street sold for $2,840,000 in July 2022. It’s been beautifully renovated and has a second kitchen as well.
• 13 Austral Avenue sold for $2,855,000 in March 2022. It’s another beautiful beachy renovation with a similar size, although the second kitchen is located in a granny flat which may be more appealing to buyers.

The Design

As I mentioned, the curb appeal is really important. If you drive through the neighbourhood, you’ll see a lot of the homes boasting great exteriors. Think: beachy bungalows and statement front doors.

While I love the red brick front, I do think it dates the property. That’s why I’d love to paint the exterior white, and have black accents like in the balustrades.

There’s a brick walkway leading up to the front door, which I’d like to tone down by white washing. These concept images show it paired quite beautifully with the white exterior.

Finally, I’d love to replace the storm front door with a traditional door in a fun colour, like teal. That will make it really stand out from the street, and with it being a corner block, also draw attention when cars drive past.

As for the interior, I’m thinking modern coastal. I love the colour on these kitchen cabinets, paired with the light timber floorboards and light subway tile.

This colour scheme can continue throughout the house, including the main bathroom. I’m also drawn to VJ panelling – one, for the beachy feel but also for the cost savings vs. tile. The VJ panels can also be repeated in the laundry room for a cohesive look throughout.

As for the downstairs unit, we can have a little more fun here with statement tile, and coloured appliances (I LOVE this light blue Smeg fridge). With a downstairs unit that’s quite small, it’s important to keep it light and bright.

I want to point out that these results can all be achieved without doing any major demolition. A lot of it is simply paint, new tile and hardware changes. Plus, making cost effective choices like using VJ panelling and subway tiles.

Estimated Results

Now that you see where I’m going, let’s look at the numbers for this North Manly pre-sale renovation.

Post-renovation, my estimated price guide is $2,400,000-2,800,000.

That’s a $500,000 to $900,000 uplift in just 8 weeks.

With an all in budget of $166,750, that leaves roughly a $300,000-700,000 profit or a 5x return on investment.

Conclusion

This North Manly Pre-Sale Renovation Case Study shows the potential for homeowners in the Sydney area to achieve substantial returns on their investment.

This hypothetical example where $170,000 worth of renovations yielded a profit of $300,000 to $700,000 highlights the power of partnering with a pre-sale renovation specialist like Wealth House.

The best thing is with Wealth House, there’s a renovate now, pay later program so the owner doesn’t pay for any renovations until settlement. In addition, I’ll do all the project management and oversee the builder to eliminate stress and overwhelm.

So if you’re considering a pre-sale renovation but aren’t sure where to start, I’m here to help. Get started by scheduling a consultation today.

Like this? Pin it for later!

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.