Maximising Value: 3 Crucial Lessons for High-Impact Renovations
Flipping houses in Melbourne is about more than just picking a property and doing a quick makeover. It’s about being strategic with your renovations to ensure you see a return on your investment. Over 20 years of flipping houses, we've learned some essential lessons that have helped us consistently turn a profit. Here are three key insights we wish we knew when we first started, but that you can apply right now for maximum results.
1. Research Renovated Sales in the Area Before You Buy
Before diving into a renovation, always do your homework. Check out what similar properties have sold for in the area—especially those that have been renovated. This gives you a clear understanding of the potential for a return on your investment.
Why this matters:
By looking at recently sold properties, you'll be able to gauge:
What buyers in the area are willing to pay for renovated homes.
What kind of renovations are increasing property values (e.g., open-plan living, modern kitchens, etc.).
Whether the costs of renovations will justify the added value.
It’s easy to fall in love with a fixer-upper, but if the area’s market won’t support the costs of your planned renovation, it might be best to walk away. You need to know the potential end value before making any investment decisions.
2. Don’t Reinvent the Wheel – Learn from High-Selling Renovated Homes
You’re not in this to do something completely new and untested—look at what’s been successful in the area and replicate it. If homes in the neighbourhood are selling for high prices with a specific type of renovation, it’s worth considering how you can incorporate similar elements into your project.
How to apply this:
Study recent sales of renovated homes in the area and note the finishes, layouts, and features that are trending.
For example, if you notice that homes with a large kitchen island and timber floors are fetching top dollar, consider implementing similar features in your flip.
Focus on renovations that have proven market appeal, like open-plan living spaces, modernised bathrooms, and clean, neutral colour schemes.
It’s great to be creative, but sometimes it’s better to learn from success rather than trying to reinvent the wheel. This way, you’re aligning your flip with buyer expectations and boosting your chances for a quicker, higher return.
3. Focus on Visible Renovations—Spend Money Where It Counts
Here’s a rookie mistake that many first-time flippers make: spending money on things that won’t make a visible difference to buyers. Yes, increasing the insulation in your walls or upgrading the wiring might be beneficial for the house in the long run, but buyers won’t pay a premium for things they can’t see.
Where to focus your budget:
Kitchens and Bathrooms: These are high-value areas that buyers pay attention to. A modern kitchen with stone benchtops and sleek cabinetry will definitely attract attention.
Street Appeal: The exterior of the home is the first thing buyers will see, so don’t overlook the importance of a fresh coat of paint, landscaping, and even minor fixes to the facade.
Living Areas: If you’re updating, focus on spaces that buyers use most often—living rooms and dining areas. Make sure these areas flow and feel spacious.
If you focus on visible improvements that enhance a buyer’s perception of the property, you’re more likely to see a higher return on investment. Money spent on things like insulation, underfloor heating, or upgraded plumbing may be nice to have, but they won’t always add the kind of value you’re hoping for in a flip.
Final Takeaways: Renovating for Profit in Melbourne
Flipping houses in Melbourne is about being strategic, practical, and mindful of the market. Make sure you can see how you’re going to get a return on your investment by researching what’s selling in the area and avoiding unnecessary upgrades that won’t give you a solid ROI. Focus on the renovations that matter—those that buyers notice and are willing to pay for.
If you follow these principles, you’ll be well on your way to turning your next flip into a profitable venture. Happy renovating!