Homeowners, Janet and Fred bought this western Sydney home in 2016, with the aim of building a property portfolio for long term wealth accumulation. The couple deliberately purchased an “un-renovated” property so that they could do a cosmetic renovation and add instant equity and rental yield to the property. On completion of the renovation, they hope to attract permanent tenants who will pay the bulk of their mortgage costs moving forward, until they decide to sell the property.
While Janet and Fred have a solid investment strategy in place, they have very limited experience when it comes to renovating. With their limited budget too, they’re worried about making novice mistakes that will see unnecessary money fly out the door. As such, they sought the professional help of Cherie Barber so she can offer her expert opinion on cosmetic renovations to low budget properties.
Cherie’s renovation strategy was to cosmetically refresh the entire house on a reasonably low budget, with the aim to produce a modern standard and attract more permanent future tenants. The cosmetic renovation works included:
- Add new kitchen cabinetry to the existing kitchen to extend the size of the kitchen.
- Cosmetically refresh the whole kitchen (laminate paint, benchtop resurface).
- Cosmetically refresh the existing bathroom (tile paint, new mirror, new flooring).
- Sanding & polishing of all floorboards internally.
- Paint house internally throughout including all walls, doors & trims (ceilings not required).
- Install new window furnishings.
- Install new lighting & ceiling fans throughout the property.
- Install new mirrored robes into all 3 bedrooms.
- Install new door locks.
- Install a new concrete driveway.
- Add a new fence to the front of the property with a new modern letterbox.
- Externally paint the entire property.
- Complete landscaping done DIY including new turf and new plants.
- Spray painting of all fences externally.
- Install decorative screen around front porch area.
Property Value (Before Renovation): $510,000.00
Renovation Spend Total: $31,902.32
Renovation Timeframe: 8 days
Property Breakeven Point: $541,902.32
Property Value (After Renovation): $580,000.00
Net Profit Margin: $38,097.68
Please note there is NO capital gains tax, agent’s commission, marketing costs or finance break fees applicable as the property is being rented not sold.
ITEMS RECEIVED FREE FROM SUPPLIERS:
Property Styling by Advantage Property Styling – Approximate Value: $5,000.00
If you’d like to learn more about Cherie Barber’s Cosmetic Renovations For Profit Course and learn how you too can renovate for profit too, click here.
*Editor’s note: This post was originally published October 14, 2016, however has been refreshed for the current market appropriateness.