Out of interest, what do people consider a minimum return on investment for a reno ie: 20%+ or more of pruchase price? Or do you base it on a figure…..I guess my questions is… how do you guage whether its worth doing a reno or not?….
ie: if you have a 200k house, and you know that with a 30k reno it will increase value up to 60k or 25%… etc……is it worth it.. at what stage does it become too much for not enough gain?[inlove]
Snowflake
Hi Snowflake
It would depend on the reno. A quick in and out might net only $10-20K (after purchase and selling costs) and still be worth doing. But a complete makeover would need to promise a lot more than that as the risk of finding extra stuff that needs doing goes up exponentially.
Mum
Don’t forget if you only hold the property for less than 12 mths then you are slugged with full Capital Gains Tax. Not to mention those stamp duty costs….
We always consider the return based on cash in and cash out. SO how much return on your cash not on the lending!
Can I suggest that you look at the worked examples in Steve’s first book? These are well explained and deal with real life situations.
Time Matters
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