Experts say the value of a renovation depends on what you’re going to sell. Photo: Mark Sheppard Bathrooms and Renovations Canberra.
In the face of soaring construction costs, the fixer-upper ain’t what it used to be in today’s real estate market.
While conventional wisdom taught us “Don’t renovate before you sell; let the next owner do it to their taste”, one expert says a calculated investment can yield jaw-dropping returns.
Mark Sheppard Bathrooms and Renovations director Mark Sheppard says there’s mounting evidence that buyers prefer the certainty of a quality renovation built into the price, rather than unknown renovation costs looming.
“Property prices are eye-watering now, so people are more discriminating,” he says.
“Today’s buyer has a keen eye for quality, and they’re willing to pay more for it than people realise.”
Case in point, a property he recently renovated in Flynn, which came to him in very poor condition, sold for $320,000 more than the real estate agent had told the client to expect.
“They sold it within a week at a record price for that type of property in the area,” Mark says.
“The owner spent about $160,000 on renovations, presenting it for the type of buyer that was likely to buy it … $160,000 extra in your pocket is not a bad result for 60 days’ work.
“In my experience, maximising competition for a property is about marketability. It needs to present well, photograph well and create emotional engagement. If you fail to do that, it can take longer to sell.”
There’s a balancing act, however, between renovating for a good return on investment and overcapitalisation.
Is it worth spending $55,000 on a kitchen even when it’s not your forever home?
“I have seen those kinds of investments return threefold, numerous times. But it depends on the house, and the value is relative to what you’re going to sell,” Mark says.
“You wouldn’t do an $80,000 kitchen for an average house. That’s not value for money. But if it’s a $2 million house, then it absolutely makes sense to do something more premium.”
Mark Sheppard says carefully considered work is always worth doing. Photo: Michelle Kroll.
To gauge what makes sense for your own property, Mark warns against relying on outdated internet estimates.
“Googling the average cost of a renovation won’t return accurate results,” he says.
“At today’s prices, a typical bathroom is about $50,000, and a kitchen is between $50,000 and $70,000. These are invariably the best value renovations that will increase the value of your property.”
Other than major overhauls, he notes that smaller, high-yield cosmetics can also move the needle.
“Smaller renovations that have a good return on investment include painting and decent flooring. Those things can transform a home.”
But shooting for a premium price tag doesn’t mean you need to fit out the home with gold-plated fixtures.
According to Mark, there is a distinct difference between high-end luxury and mid-range quality — and today’s buyers are looking for the latter.
“Your renovation doesn’t have to include top-end finishes — people just want quality,” he explains.
In fact, trying to cut corners with a cheap cosmetic flip can backfire spectacularly. Modern buyers are acutely aware of cheap products and sloppy finishes.
“Those things almost always detract from the value of a property,” Mark says. “But carefully considered work is always worth doing.”
For more information, contact Mark Sheppard Bathrooms and Renovations.
