Renovation for selling

IP was bought 3 years ago - $630K + stamp duty . It is a 3 bedroom highset house with a granny flat downstair, sitting on 800+m2 lot on main road in Camp Hill. Renovated 3 bedroom house with a deck on 600m2 lot, same road, has recently sold at $740K. My expectation for my bigger house and bigger lot will be sold around $800,000 after renovation. I am planning to sell by next year.
Below is how to stack up the figure. However, the renovation cost may reduce by $20,000 if I do not update kitchen and minimizing the bathroom update costs.

Main reasons for selling are to (1) remove interstate high maintenance cost, (2) high land tax, (3) no deduction to personal income (owned by a trust), (4) free the equity to invest in something else more effectively.

 

Another version - I reduced overstated costs

 

Why add new air conditioners if you are selling?

 

I added air cons anyway because I need rent it now.

 

What is the spec of the house that sold for 740k?

Spending 80k to make 14k?

You also have no idea how the market will be in months. Try the market now to see how you go imo.

 

Not sure if you did this or not but if I were you I'd be:

1: Getting 3 top agents in the area through your home and ask what improvements they think are the most important then make a list.
2. Determine from comparative reno sales and agent feedback what end value you can except after the renovation.
3. Then determine for every $1 spent, how much are you projecting to get back? If spending 80k to make an additional 15k (for example) is the proposition then you really need to ask yourself is the return commensurate to the risk/time/effort involved ?

Imo all Add Value propositions need to be assessed on a Return for Risk involved basis

 

3 years is too short to reap any benefit Re Capital Gains. Camp Hill is a very nice area, well sought after. I would hang on as long as I can. You should get more than $800k then. How is your Rental yield look like? Negatively geared?

From what I see, nobody really recover cost of Reno unless they buy cheap and do the work themselves. It nearly always blow the budget if you want to do a proper job.

As for your costing, I won't comment on the Tradies side. But from general side, a few things are missing:
- Agent marketing fees including photography and campaign
- Higher fees for auction
- Project Manager
- Loss of rent

Looking at your reasons of selling, is it fair to say that this property was bought without proper consideration to the legal and financial impact? Would suggest to speak to a good Accountant and Tax Agent, to see how those issues can be reversed/ modified now.