Some suburbs are better than others for value-adding to your home through renovations. Source: Herald Sun
LOCATION, location, location is the real estate catchcry and so it is with renovations.
Renovating for Profit’s Cherie Barber (www.renovatingforprofit.com.au) says renovating and then selling for a profit doesn’t work in every suburb.
"You can renovate in some suburbs and earn a great profit, yet work months on end in others and come out with a loss,” Cherie says.
Structural renovations work favourably in some suburbs while cosmetic renovations are better suited to others.
Renovation hotspots are suburbs 3km to 10km out from the Brisbane CBD. Suburbs 10km to 20km out are good for owner-occupiers and investors to do cosmetic and structural renos, while areas 20km to 75km away are perfect territory for cosmetic makeovers.
The CBD ring (0 to 3km from the main centre) is a no-go zone.
The main factors to consider are the level of pricing disparity within a suburb and the extent of buyer demand attributed to the physical attributes of the suburb.
"Without a doubt, the renovation goldmine suburbs nationwide are the inner-city fringe suburbs approximately 3km to 10km out from the main state CBD,” says Cherie.
"Inner-city fringe suburbs are lucrative renovation markets but primarily for structural renovations.
"The ability to buy an under-utilised property at a lower price and sell substantially higher by increasing the floor space is far more achievable in inner-city locations.
"Basic cosmetic renovations will return a moderate return on investment for owner occupiers, however, won’t work for investors looking to flip for a profit. ”
Regional locations are more unpredictable.
Cherie says structural additions in immediate town centres of rural locations are unlikely to generate a substantial profit (again due to lower property values), but under-utilised properties on larger parcels of land out of the town centre could profit by increasing the floor area.
Even the addition of a second dwelling, like a granny flat, guesthouse or large shelter structure, could boost a rural property’s value and provide a point of difference among buyers.
"Smaller profit margins can be made on quick cosmetic renovations for investors in country suburbs, however, absolute vigilance is required knowing the costs of the project and maintaining tight cost control to avoid overcapitalising,” she says.
"Standard fixtures, fittings, finishes and budget-priced tradies are the keys to success when cosmetically renovating in the regional areas.
"And naturally, there are some properties that don’t fit into any equation.
"Coastal properties hundreds of miles out from a main CBD location can be perfect for a structural reno where the lifestyle attributes of living in a sea-change suburb drive up pent-up buyer demand.”
Source – Michelle Collins: The Sunday Mail (Qld)
