How to calculate expected equity generated from reno?

Discussion in 'Renovation & Home Improvement' started by kacheek, 4th Sep, 2021.

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  1. kacheek

    kacheek Well-Known Member

    Joined:
    3rd Mar, 2021
    Posts:
    202
    Location:
    Sydney
    Hi,

    I'd like to do a cosmetic reno on my IP to generate some equity for a deposit for another IP.

    What is the most reliable way to calculate how much equity I can expect?

    E.g. If I spend x amount of dollars on new floors, paint, kitchen, how much will that translate into increased value?

    I have looked at comparable sales in the area but it is hard to gauge accurately so wondering what method people use.
     
  2. Clean Cookie

    Clean Cookie Well-Known Member

    Joined:
    20th Mar, 2021
    Posts:
    385
    Location:
    Brisbane
    Market comps is about the only way. Short of getting an onsite valuation and asking them. Ideally you'll make $2/$1 spent.
     
  3. Peter_Tersteeg

    Peter_Tersteeg Mortgage Broker Business Member

    Joined:
    18th Jun, 2015
    Posts:
    8,130
    Location:
    03 9877 3000
    Compare your expected end result with actual similar sales nearby. There's no formula you can apply to this.
     

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