Read article : Case Study: How To Make Money On A Renovation
Cherie Barber is a renovator on TV’s The Living Room and runs renovating-for- profit workshops. Cheriebarber.com.au
One of the guaranteed ways to add value to a home is to reconfigure the layout to add an extra bedroom and create open-plan living. These are the two key things on my radar when I size up a property and as I’m studying the floor plan, tapping walls and pacing it out.
When I came across this house in Sydney’s west, in an area that has already demonstrated great capital growth, I didn’t hesitate to snap it up. With a few tweaks to the layout and a better connection to the generous outdoor area at the rear, I knew I could tap into the full potential of the existing three-bedroom brick home. This was a wise investment.
The jumble of sprawling living areas offered abundant space, but no open-plan flow. By removing a gyprock wall between the traditional living and dining areas, the new L-shaped living space is now a free-flowing, light-filled gem that spills into the back sunroom and updated kitchen. With this redefined living area, I was able to eke out a new bedroom in the centre of the house. By closing off the arch in the entry foyer and stealing space from the living room, I created a new bedroom, opening off the hallway. Two vented skylights compensate for the absence of a window. It’s now a four-bedroom house in an area favoured by families. In fact, a tenant was secured on a one-year lease immediately upon completion of the renovation.
The bathroom was dated, but its vanity, shower and bathtub were fine, so only a simple makeover was needed. Gerflor vinyl flooring and new tiles for the shower floor were supplied and installed for less than $300, while White Knight Tile Paint was used to mask the decorative tiles.
The patchwork quilt of flooring left by the assortment of old rooms certainly couldn’t stay. Durable laminate floorboards in a honey colour called Chestnut now unify the whole house. They’re a fraction of the cost of hardwood floors, yet still provide the warmth of timber.
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The rear of the house was blessed with an abundance of windows, wrapping around two sides of the sunroom and offering a restful, leafy view. However, the addition of new bifold doors off the living area and sunroom has created a seamless indoor/outdoor flow onto the large verandah and sprawling deck beyond. Not surprisingly, the garden needed just as much TLC as the house, and nearly $3000 was spent on plants, turf and landscaping supplies.
Putting in a brand new kitchen would have totally blown my target of completing the renovation, inside and out, for as close to 10 per cent of the total value of the property as possible. That’s my recommended budget for any cosmetic renovation, but it was an ambitious target in this case, as there were also structural changes, like the bifold doors and creating a new bedroom. By keeping the kitchen cabinets but replacing the fronts and benchtop, I was able to complete the kitchen – including new appliances – for about $3000, plus labour.
Now for the wow factor! I decided to marry the beige tones of Taubmans Penguin March with a blaze of punchy blue wallpaper. The entire length of the living area and one wall of the long hallway are now decked in Lines wallpaper. The large master bedroom at the front of the house basks in the luxurious blue of Taubmans Shindig.
It was three weeks of intensive effort to transform this rough diamond into the inviting family home it is today. But the ultimate sign of the successful renovation of an investment property is whether the numbers stack up. With a total interior/exterior renovation cost of $67,760, it came in at just a whisker above 12 per cent of the cost of the property – a fantastic outcome. But did it turn a profit? The triumphant answer is yes, it certainly did. I purchased the house for $550,000 and it was revalued post-renovation at $690,000. This is a gross profit of $72,240. That’s the kind of outcome an investor seeks.
Labour carpentry & building $19,420
Electrician $3500
Plumber $635
Roof spraying (done by painters) $1500
Painting $2000
Wallpaper installer $880
Garden excavator $750
Cement renderer $2640
Construction labourer $675
Rubbish removal $4425
SUBTOTAL: LABOUR COSTS $36,425
Materials timber & all hardware $9539
Flooring (supply & install) $4450
Bifold doors $6363
Kitchen doors & panelling $1585
Kitchen benchtops $645
Kitchen appliances $975
Bathroom flooring $160
Bathroom tiles (supply & install) $100
Curtains & blinds $1718
Wallpaper $520
Paint $1480
Skylights $800
Equipment hire $260
Turf, plants & Landscaping $2740
TOTAL $67,760
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