Real Estate

renovate versus rebuild pros and cons

Written by The ReReport
As seen in the Source link, written by on 2018-12-17 10:02:35

When it comes to weighing up the pros and cons of whether you renovate or knock down and rebuild — it’s best to do your numbers first.


Incredible renovation of 80s prize home

In the case of Hot Property Buyers Agency senior buyers agent Zoran Solano, that’s exactly what his team did when they purchased a Stafford home for a client in 2012.

“The journey to this project started back in 2012, when our team purchased this beautiful 637sq m block of prime elevated land,” Mr Solano said.

“Back then the property had a humble three-bedroom, one-bathroom post war home on it, which our buyers agent team secured for around the mid-$400s.

“The property was then rented out for around $410 per week — that’s around 4.58 per cent gross rental return.”


But with all older homes they require maintenance and upkeep, and Mr Solano said the rental demand and return slipped, so they decided to invest back into it earlier this year.

“We looked at the different options available, such as knock down new build, raise and build under, extend and renovate,” he said.

“All those options where considered and in the end the client decided that a knock down new build, was the best way to go.”

Mr Solano said given the rental demand in Stafford, it was decided on a five-bedroom home, but renovation costs were two high.

“Ultimately we said we’ll knock this building down and start fresh, that way we have a builder’s warranty and the tax depreciation and overall the maintenance would be a lot less,” he said.

“After considering the market demographics, as well as the needs and wants of prospective tenants, we designed this house from the ground up to cater for the gentrifying market.

He said the builder’s warranty was for six and a half years, with a longer 20 year structural warranty.

They worked with Elevate Design Studio to come up with a design that matched the contours of the land and the style of property in the area.


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The two-storey 289sq m home has four bedrooms, plus a media room (or fifth bedroom), a double lockup garage and two living zones.

“The build was undertaken in record time from knock down to hand over it was all over in less than five months by Lancon Constructions,” he said.

Fast Facts

Purchase Price: $465,000 (2012)

Previous Rental Return: $390-410 a week or 4.5 per cent

Cost of Project: $520,000

Total Investment: $985,000

Current Value: $1,200,000

Current Return: $890 a week or 4.7 per cent gross

Notes: This project increased the clients gross rental return and improved their tax depreciation and reduced maintenance.