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Is it worth renovating in today’s market? And how to avoid blowing your budget.

10 August, 2022 / Category: Blog

Is it worth renovating in today’s market? And how to avoid blowing your budget. banner image

Is it worth renovating in today’s market? And how to avoid blowing your budget.

Why is it so hard to renovate at the moment?

If you’re considering a refurbishment, renovation or even a minor improvement of your home or investment property, no doubt you have encountered one or more of the following issues:

  1. Accesss to tradespeople: home renovations boomed during 2021, driven by COVID lockdowns driving people to look for more space and the federal government’s Home Builder Grant. This significant increase in demand has led to a shortage of tradespeople. Our clients often comment that they can’t even get on to a trade, let alone book them in for a job.
  2. Soaring prices: A combination of inflation, product supply issues, and labour shortages has led to substantial price increases in the construction industry. A job done in 2020 could be up to 30% higher if completed today. 
  3. Supply shortages: A global surge in demand for construction materials, particularly timber and steel, coupled with international supply chain issues, has seen a considerable supply shortage. Devastating bushfires have crippled the timber industry. Chinese steel production was wound back due to predicted supply chain decreases at the beginning of the pandemic that did not eventuate—all culminating in today’s perfect storm. Projects now need precision planning to be executed on time and within budget.

Should I renovate now or wait until the storm passes?

Deciding whether or not to weather the renovation storm depends on your circumstances and reason for renovating. Ellen Williams, Project Consultant at Infolio Property Advisors, says, “If you’re an investor looking to refurbish a rental project, then you need to look closely at the numbers and your potential for greater rental return if you renovate. On the other hand, if you’re an owner occupier, you need to understand if the refurbishment will add capital value to your property and your lifestyle.”

For Investors: It’s a landlords market. Capitalise on it.

Melbourne is officially a landlord’s market as rental vacancy across the city hit 1.5% in June 2022, and house and unit rentals are up by 12% in the past year.* This creates an opportune time to use improvements to increase rental rates further and for the long term. At Infolio, our portfolio vacancy rate is at 1%, and our properties are on the market for an average of 14.9 days (compared to the market average of 28 days for June 2022).* 

Williams says, “Our proven track record shows rental properties that undergo refurbishment projects tend to result in rental growth ranging from 10% – 30% depending on the scale of the improvements.”

Talk to us about how we can help you lease your property faster and for a better rate, or discuss your renovation project with our Infolio Projects team.

Owner Occupier: Tick all the boxes but don’t overcapitalise.

Bigger isn’t always better when it comes to renovating. We’ve been in the property industry for more than 20 years and are intimately familiar with how and when to add value to your property. Infolio Projects has completed numerous successful renovation projects for our clients with the confidence that the improvements add value to the property.

The gap between a renovated property and one that needs a lot of work is widening. Buyer’s no longer want ‘renovator’s delight’, and they are placing greater importance on properties that are renovated for them.

What is Infolio Projects, and how can we make your renovation dreams a reality?

Infolio Projects, your renovation and maintenance specialists.

We know how hard it can be to find and coordinate multiple tradespeople. That’s why we rely on our established network of experienced tradespeople. These relationships mean we can negotiate competitive prices and ensure your renovation is delivered on time, on brief and with minimal disruptions.

Plus, we’ll ensure you don’t miss a thing by updating you with project milestones via regular video, image and text updates.

Infolio Projects can deliver your project from start to finish and specialise in compliance and maintenance, significant improvements, and renovation projects. 

Are you buying a property that needs a renovation? Purchase with confidence at Infolio.

If you’re buying a new home with Infolio’s buyer’s advocacy service, it’s prudent to understand how much necessary renovations might cost. We offer a complimentary renovation quoting service so you can understand the potential costs associated with any refurbishments or upgrade works before purchasing the property.

The proof is in the numbers. Check out some of our recent projects and their return on investment.

3/14 Chatsworth Road, Prahran
Infolio Projects gave this two-bedroom apartment in the heart of Prahran a makeover including a bathroom refresh, all new kitchen appliances, and a split system unit.

Before the upgrade, the unit was leased for $330 per week. Our client invested just over $10,000 in the upgrade works (including project management by Infolio Projects). Following the upgrade, the unit was leased after 12 days on the market for $400 per week (a 21% increase). 

 28 Princess St, Seddon

As Vendors Advocates for this property in Seddon, InfolioProjects assisted our clients in preparing the house for sale. This included a complete refurbishment and interior styling. The refurbishment included:

  • paint (internal and external)
  • polished floorboards
  • a bathroom re-fresh
  • general repairs and maintenance
  • gardening 
  • cleaning

The property was sold in May via auction and achieved a sale price $55,000 above the reserve and well above our clients original expectations. 

28 Princess Street Seddon, client testimonial:

“This is the second time we have worked with Infolio, and it was just as good as the first time. Our house in Melbourne had been rented out for a few years and was pretty tired and needed some TLC before going to auction. We were interstate, and having Ellen look after everything was a dream. She took the reigns and managed the entire job with a problem.  She exudes confidence, professionalism and a passion for getting the job done to the highest of standards. The house looked amazing when Ellen and her team finished with it, and the house was styled for sale. It sold at auction last weekend for more than our Reserve so we’re very happy. We can’t recommend Ellen and the team at Infolio enough. We will definitely be calling on their wonderful services again. ”  Dr. Gerald Mair & Sophie Meyrick.

Have a renovation project you need our help with? Contact our Infolio Projects consultant today or find out more. 

* Domain’s monthly Rental Vacancy Rate Report

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