When you start renovating, it’s easy to get caught up in the excitement. New kitchen? Yes please!! Dream bathroom? Duh, of course! But somewhere between your Pinterest boards and fave paint samples, there’s a little reality check you need to keep in mind: Can you overcapitalize on a house?
Short answer: Yep, you definitely can.
And if you’re not careful, it can hit your back pocket harder than you think.
Wait, What Does “Overcapitalizing” Actually Mean?
Overcapitalizing is when you spend more money on your renovations than your house will be worth once you’re done. In other words, you might pour $150,000 into upgrades, but your home’s value only increases by $80,000. Ouch.
If you’re renovating to sell your property, it’s especially important that everything you do is all about increasing your profit in the sale. That’s where Kudo Homes® are the guys to get you there.
How Does It Happen?
There are a few ways renovators (even smart ones) fall into the overcapitalizing trap:
Going way beyond the street standard: Renovating to be the nicest in the street is one thing, but if your property is the flashiest one by a long shot, buyers might not want to pay extra just because you added a rooftop spa and gold taps.
Adding super niche features: Home cinemas, wine rooms, saunas—they sound amazing (and they are), but if most buyers don’t see them as essential, they might not add real value.
Blowing the budget on ultra-luxury finishes: Designer everything is tempting, but if the area can’t support those prices, you won’t get your money back.
How to Renovate Smart with Kudo
Good news: avoiding overcapitalizing isn’t rocket science. You just need a smart game plan:
Study your market: Look at similar homes nearby—what features do buyers expect? What are they willing to pay for?
Work backwards: Figure out your home’s likely value after renovations and plan your budget from there. Kudo is all about maximising your profit after all costs. Even if you fix-up a few small things to get an extra $10k after all costs, isn’t that awesome? It can buy you that dreamy, luxury sofa you dreamed of for your new home. Or maybe you’ll spend $50k to potentially make an extra $100k+ when you sell, which can buy you a brand new car that wasn’t possible without the Kudo reno.
Stick to the big-ticket winners: Kitchens, bathrooms, open living spaces—they’re usually worth the investment. If a potential buyer sees that they can move right in and not have to lift a finger in those areas, they know they can live comfortably and happily in a quality home, knowing that anything else they want to work on, can be done over time.
Choose quality over crazy: Go for great design and practical improvements, not just bells and whistles. Kudo have the knack for designing to impress without blowing the budget. Because those extra little things matter for the buyer, and so does maximising profit for you, the seller. They go hand-in-hand.
Get advice: Talk to us, because we genuinely want you to maximise the profit you make in the sale of your property. Reputation is everything, so if we make you happy, you’ll tell everyone about it.
Renovating With Your Head and Heart
Renovating should absolutely make your property better, more beautiful, and more neutral to attract the most buyers —but it should also make financial sense.
The trick? Make smart upgrades that boost your home’s value.
We Know Our Stuff
The Aspendale Gardens property you see on this page worked with Kudo to maximise their profit at the recommendation of their real estate agent, who not only sees how much profit we help their clients make, but how quickly we’re able to get the job done without compromising quality or workmanship. As you can see, it was run-down and needed some love.
Before their reno with Kudo, the owner didn’t expect much – in fact, they considered their property to be a knock-down-rebuild – so they were extra careful with their spend. Like their agent, Kudo saw the massive potential in their property. The owner spent around $50k on their Kudo renovation – which took 4 weeks to complete – and after seeing the result, told their agent they wanted to increase their asking price!! They made $90,000 more profit than they expected to make, thanks to working smartly with Kudo. Can you even imagine what you would do with an extra $90,000?
Oh, and did we mention that they didn’t pay a cent for the reno? They took advantage of our ‘Renovate to Sell, Pay on Settlement’ payment option, so their funds are paid on settlement.
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Are you thinking of renovating but not sure where to draw the line?
Kudo Homes® can help you —without blowing the budget.
Contact us today, and let’s turn your dream home into a smart move too.
