Thanks to all the home reno shows, buying and making over a house in need of TLC might look like a no-fail money-spinner.
Part-time property dabbler Claudine Novak knows the temptation well.
‘I bought my first house and made a bit of money when I sold it five years later. It gave me the confidence to think about renovating for profit.’
Find the property
Check out the sales of similar homes over a period of time and be certain of your target demographic.
‘I buy in the area in which I live because it’s the market I know. I also don’t want to travel far, as variables eat into your profit,’ says Claudine.
‘Some of the best advice I received was to make a detailed projection of costs before making an offer,’ she says.
Costs include purchase price, holding the property, loans, taxes, reno costs, and selling expenses.
Being thorough and realistic prevents the bottom line coming as a nasty surprise. Set a minimum return then anything on top is a bonus.
Once the property is yours and finance is settled, work can begin.
‘For your first project, aim for three months and don’t exceed six. The goal is to buy and sell in the same market.’
Maximise the investment
The Victorian bungalow was in good structural condition with intact period features, including original tessellated tiles, a bullnose verandah and intricate iron lacework.
‘The lounge room was small but I could see that opening the kitchen into the living space would transform the look and feel,’ says Claudine.
Another clever improvement for minimal cost was to raise the ceiling, adding to the expansive and bright feel of the primary living space.
The old spotted gum floors had to be replaced, an expense Claudine wished she could have avoided, and the bedrooms were carpeted to add a luxurious feel.
The rear of the house had a lot of potential due to the size of the yard, so Claudine installed new sliding glass doors and added a deck.
In line with the deck, an external laundry and housing for a water tank immediately improved the look and function of the home.
The old pavers were lifted and replaced with turf to better suit the needs of a family, while some separate space for grown-ups was incorporated into the design.
‘The eye went straight to the garage door, so I decided to keep a paved section at the end of the garden and painted everything fresh white.’
Adding smart furniture and a pergola created a sophisticated entertaining area and highlighted the garden’s multifunctional appeal.
A new path and paint give the home a neat, well cared for look.
Increase the light
Artificial lighting goes a long way to improving liveability, but nothing beats natural light.
Installing skylights or sun tubes can be the best money you’ll spend.
‘Adding light where I can is something I always do,’ says Claudine. ‘It’s easy and effective to put in a skylight, and the small cost is far outweighed by the great result.
‘In this bathroom, installing a skylight allowed me to block off the existing window that looked right into the house next door,’ she says.
Before: Despite the space, the old bathroom had a poor layout with little room for storage.
After: A new skylight and modern fixtures turn the room into a luxury retreat.
Decorate and paint
In Claudine’s house, a retro tile motif dominated the long hallway from the entrance.
While unique, it had the potential to put off buyers so Claudine covered it with particleboard, referencing the period with embossed wallpaper beneath the dado rail.
Avoid bland walls by adding colour and texture with accessories and art.
‘Whatever your taste, what is on the walls should inform decorating choices. Large, colourful pieces are great for staging for sale,’ says Claudine.
But don’t be tempted to use too much of your own style in the home.
‘Keep it fresh, simple and unfussy to appeal to potential buyers.’
Before: The living room was small, with nondescript carpet and a limited outlook.
After: New sliding doors create a seamless flow to the outdoors for relaxed living.
The work took 10 weeks to do and cost $185 000. The after-sale profit was more than $200 000 but was split with a joint investor.
‘The market was a bit flat when we sold but holding on is always a gamble. All in all, this one was pretty straightforward but there are things I learn every time,’ says Claudine.
‘I think an important point to remember is that no renovation will go entirely to plan and part of the process of doing this is learning to let go of mistakes and move on.’
Built-in cupboards modernise themaster bedroom and provide storage, while new shutters and carpet add luxury.
Weighing the odds
- Structurally sound and in good workable condition
- Good basic layout that will suit conversion to modern living
- Solid timber floors and/or period features
- The potential to create pleasant views
- Space to extend without incurring opposition and delays from neighbours
- Rarity value such as the location, architectural design, style of property or landscape features
- Well-sited, preferably north facing, on a good street that suits the buying demographic