Pre Post Renovation Valuation

Wondering if many property investors have performed this strategy before...

I am looking to re-finance my loan so I can renovate my initial IP and have been advised by the bank and broker that I can get a pre post renovation valuation done so therefore i'll be able to have access to more funds to perform the reno and then look to purchase my 2nd IP.

The bank needs to see a fixed price renovation quote which I am organising at the moment. This all sounds pretty good and is there anything I am missing that I should be wary of ?

I have a budget in mind so to not overspend on the reno so it should be pretty straight forward, pending what the valuation comes in at.

My place is a 1 bedroom unit in Freshwater (NSW) and tracking recent sales of similar properties in the area:

unrenovated is worth around $320-$325k

renovated is worth around $360 - $380k
 
One of the problems with this strategy is that you are unable to save money on the reno by doing some of the work yourself (if you wanted or were able to). The lender wants a reno quote from a building company.

An alternative would be to do the reno out of your own or other borrowed funds and then apply to the lender to refinance these funds (and more?) back out post reno.
 
If you are not changing the structure.. that is everything within the same walls

Then you need to provide the contract price, the progress payment schedule, the page of the contract that shows the builder and your details .. and above all, ..... the specifications of the work, the finishes and the materials etc .. basically what the builder has quoted to do.

That should be it THe valuer will inspect and measure the place but the description and the valu will be based on the specifications not what they actually see.

Beware .. usually if you are getting a builder involved the cost will often exceed the value added - but this mostly applies where there are structural changes, such as adding rooms.

cheers

RightValue
 
Yes i've got a building company doing the quote and i'm aware that the valuer most probably will not be physically inspecting the unit to do the valuation.

As I really don't have too much money to pay for any of the reno work myself I am relying on this valuation to be able to fund the works.

No structural changes either just cosmetic with new kitchen, bathroom and lighting (already painted and new carpet put in) and I have a figure in mind what is should cost, so will be interesting to see what the quote come in at.
 
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