In the competitive realm of selling real estate in Sydney, sellers face a constant challenge: deciding whether to renovate their properties before putting them on the market. This article delves deep into this recurring question, offering insights from the vibrant Sydney real estate landscape.
To renovate or not to renovate?
At first glance, the answer seems pretty straightforward – yes, you should renovate. A property showing signs of wear and tear can give potential buyers pause, making them wonder about hidden issues or potential problems. However, there’s more to this decision than meets the eye.
For instance, if you spend $50,000 sprucing up your property, there’s a strong likelihood you’ll recoup that expense at sale time, possibly even garnering a significantly higher return. But conversely, if you opt not to renovate and your property clearly needs a $50,000 makeover, you can bet that buyers will deduct more than that amount from their offers.
Yet, the decision to renovate goes beyond mere math. It also factors in time, effort, and the emotional toll of overseeing renovations. Thankfully, this is where expert real estate agents in Sydney can make all the difference. A savvy agent not only advises on the most impactful renovations but can also connect you with financial entities that provide upfront funds for renovations, ensuring your property stands out in the bustling Sydney market.
The Transformative Power of Renovations: Two Case Studies
To better illustrate the potential impact of renovations, let’s delve into two illustrative examples from my own professional journey in the Sydney real estate scene:
1. 1105/148 Elizabeth St, Sydney:
This property’s backstory offers a valuable lesson in strategic property selling. Historically used as an investment property and occupied by tenants, it seemed to promise a standard transaction. However, a detailed review of its tenancy routine report provided us with a unique insight. We visualized the property’s true potential, free from tenant belongings and impeccably styled. Acting decisively, we coordinated the tenants’ transition and invested in top-notch styling. The result was nothing short of a revelation. The property’s transformation allowed it to be sold before the scheduled auction, garnering an astounding $80,000 more than if sold in its previously tenant-occupied state.
Vacancy cost: -$5,200
Styling charges: -$3,000
Total Expenditure: – $8,200
Net Additional Revenue: +$80,000
2. 34/165 Cleveland St, Chippendale:
This apartment’s journey is testament to the tangible benefits of timely renovations. Having been overlooked during its tenure with tenants, it clearly required substantial work. The owner, demonstrating commendable foresight, undertook a comprehensive renovation. This included installing a sleek, modern kitchen, adding fresh paint, laying down new carpets, and executing strategic cosmetic modifications. This investment in the property’s aesthetics and functionality paid off handsomely, resulting in a sale before its planned auction and a whopping $100,000 above its pre-renovation valuation.
Vacancy cost: -$5,560
Styling fees: -$3,150
Total Expenditure: -$38,710
Net Additional Revenue: +$100,000
While every property and situation is unique, the overarching message is clear: strategic renovations, especially in a market as dynamic as Sydney, can offer a substantial return on investment. It’s not just about spending money; it’s about enhancing a property’s intrinsic and perceived value. With a keen eye for detail, coupled with the insights and networking capabilities of experienced real estate agents in Sydney, sellers can confidently navigate the decision to renovate, maximizing their property’s appeal and, ultimately, its sale price. So, the next time you’re poised to make a selling decision, remember: a thoughtful renovation could be the key to unlocking your property’s true potential.
Joseph FairchildJoseph is an awards winning real estate agent, local property economist and thought leader in the property industry. He is well versed in advanced property strategies (such as vendor finance, delayed settlements and back-to-back settlements for off-the-plan properties) which many other agents would place neatly in the ‘too hard’ basket.