Any one on SS renovates for profit?

The number has to work before get into a deal.

Buying cost includes stamp duty, solicitor, financing cost.....etc... which is about 5% of the property cost.

Selling cost includes agent fee, solicitor, ...etc which is around 3%- 4% of the end selling price.

So buying and selling cost is roughly about 8% - 10% of the property price.

Plus the renovation cost and holding cost, says around 15% - 20% of the property price.

hence, for the number to work, a property before and after reno should be increased by around 30% just to breakeven.

Example:
Property purchase @ $500,000
Closing cost around 5% including stamp duty, legal, financing( loan application fee), building&pest @ $25,000
Reno cost & interest repayment while renovating 15% @ $75,000
500,000 + 25,000 +75,000 = 600,000
Selling cost is around 4% (600,000*4%) @ 24,000
Hence the breakeven point is around $625,000.
ie, the property should sell for more than $625,000, otherwise it's likely to be in the lost position.

This is just a rough figure, obviously, it depend on numbers of factors such as length of reno, cost of reno, also quality of reno.....

I found buy reno sell is for people with trade background, or extension, addition another level.
Simple cosmetic reno is hard to make profit due to high level of transaction cost involved.

Excellent post. I agree with you - a simple cosmetic renovation wont make you much profit. Adding another storey or extension is the key. However you still need to purchase in the right areas and at a good price.
 
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