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When we think of buying a property to renovate and make a profit, it’s most often a house that comes to mind. But there is also big money to be made in apartment renovations as this project shows.
And for owner-residents forced to buy a less expensive apartment for their first step on the ladder, this is a great way to improve the quality of your living space.
This apartment is in a character building in Emily Place, Auckland, and was in need of renovation when the owner bought it for $350,000 at the end of 2011.
Andrew Murray of Apartment Specialists says the owner stripped it back to reveal the original brick and timber structure. A new kitchen and bathroom were also added, and the apartment was put on the market this year. It sold quickly, for $1,065,000.
The renovation spend was approximately $180,000 and took just three months. There were $37,000 costs in marketing and GST, but the sale still netted the owner a healthy profit in under five years.
“The market doubled in that time, but he has tripled the value of his apartment with a great renovation,” says Murray.
“So many people just buy an apartment as an investment, with no thought of renovating. They simply don’t think about adding value. Then they try and sell it with tenants in, and it looks horrible. But there is a growing number of people who are recognising there is money to be made in apartment renovation.”
Murray says his company has on-sold many apartments bought from other companies and renovated by a core group of “traders”. The average margin for owners of the last 50 renovated apartments sold by Apartment Specialists, at the most recent check, has been $99.480, which leaves them with more than $60,000 of pure profit.
“Most of these were quick renovations – a new carpet, paint and maybe a kitchen and bathroom – and the properties were staged for a sale. The renovations usually only take three weeks and the average spend is $15,000. We have people on our books who do this over and over again in the course of a year. Our top trader has made $1 million after expenses by doing this.”
Another apartment in a character building is on the market and expected to sell for $1.5m. Murray says the owner bought it for $1m and has spent $150,000 on a high-end renovation, which took two-and-a-half months. “Before he bought it (from another agency) he asked us how much we thought he could get for it after a renovation. The figures made sense.”
And an apartment in Burgoyne Street, Grey Lynn is expected to fetch around $640,000 after an impressive renovation that cost $80,000. The owners bought it for a mere $350,000. The improvements included the removal of fake brickwork.
Murray says it helps to have a good eye for a tasteful renovation, which can completely change an apartment. “A beautifully renovated apartment with emotional appeal raises the value considerably.”
Continue reading this article at the original source from Stuff.co.nz
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