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Investors: How to Tell a Home Renovation Property from a Knockdown Rebuild

Aug 16, 2016

Home renovation is one of the oldest property investment strategies in Perth and across Australia. A lot of people have made good money “flipping renos” or renovating homes bought at bargain prices and turning them into solid, long-term rental properties.

However, there is a “dark side” to home renovation. Some properties turn out to be “money pits” that you would be better off knocking down and rebuilding. But how do you tell? Here are some signs to look for.

When it’s Time to Knockdown and Rebuild

Home Renovation or Knockdown Rebuild


Every old reno is going to have a few small cracks here and there. But if you find even one that is more than 50mm wide, the home may not be worth renovating. Cracks of 5 mm or wider can indicate structural problems with the house. If these are not addressed, they will worsen with time. If you try to address them, it may be easier to knockdown rebuild.

Damp Areas

Mildew can be a permanent problem in some homes. If you are looking at a home that has musty smells and damp walls with evidence of crystalline salts, your building could be compromised by moisture. Generally, if the damp areas are relatively new and confined to a small part of the building, it can be repaired. However, if the entire building is damp, it’s time to knock it down and start over.

Mismatched Home Extensions

At Next Level Extensions, we match home extensions and second storey additions to the original home as closely as possible. If that isn’t desirable, we renovate the original building to match the extension. Either way, the home is visually and structurally uniform.

Sadly, not all home renovations go as well. Sometimes it’s a DIY handyman. Sometimes it’s a “home renovation” company that doesn’t know what they are doing. Sometimes a home looks like it has been “renovated” more than an ageing movie star’s face.

If a home has no coherent plan or structure due to too much amateur renovation, it is better to do a knockdown rebuild.

“Quirky” or Unpopular Style

It is easy to look through a neighbourhood and see what styles are preferred. If a home is quirky or has an outdated style and you are going to renovate it anyway, it is to your advantage to knock it down and build it to a style that will fetch more money from renters when it eventually goes on the market.

A quirky home that may have been someone’s dream home 40 years ago could be today’s eyesore. Don’t “double down” on a bad hand.

When to Go with a Home Renovation

These are problems in a home that can be easily and economically renovated by a good home renovation professional.

Ugly Kitchen and Bathroom

This is actually great news because you can usually use them to negotiate a lower price. The kitchens and bathrooms are the most-renovated rooms in homes people are trying to flip. The kitchens and bathrooms are often the main determinants in a renter or buyer’s decision. They can be easily modernised in both function and appearance. They offer the biggest return on investment of any serious home renovation.

Dark, Gloomy Rooms

Open floor plans are the most popular floor plans today. If a property tends to be on the gloomy and dark side, knock down the walls in your main living space and go with an open floor plan. Use large sliding doors or bifold doors to let in more light. You can also install skylights or bigger windows to let in even more sun.

Incorporate the kitchen, dining area, living room and family room into one large, open space. Not only does it give you more practical living space; it provides the illusion of even more space. An open floor plan can drastically increase value and demand for your property.

Avoid At All Costs

Bad Location

At Next Level Extensions, we are the premier provider of home renovations in Perth. With award winning home renovations designer Max Sardi, we can help you get the most out of any home renovation. But we can’t fix a bad location. If your property is in a hollow, in a bad neighbourhood or on a noisy, crowded street, all of the renovation in the world isn’t going to increase its value.

To learn more, call Next Level Extensions today: 1300 948 094.

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