Renovation Feasibility Tool

A renovation feasibility study is the numbers exercise you do before you sign a contract, it answers one question: if everything goes roughly to plan, will this project actually make money (or add enough value) once every real cost is counted?

That “every real cost” part is where back-of-envelope renovation budgets fall apart. It’s easy to price the kitchen and bathroom. It’s much easier to forget stamp duty, six months of loan interest while the property sits unrented, the agent’s commission on sale, and the buffer you’ll need when the quote comes in higher than expected.

The Renovation Feasibility Tool below lets you plug in the real cost categories, purchase, renovation, holding, and selling, for up to four properties side by side, so you can compare a cosmetic reno in one suburb against a more substantial project in another using the same assumptions for both.

The example below is hypothetical, built purely to show how the inputs turn into the outputs, not a real property, suburb, or SuburbsFinder user data.

The scenario: a dated three-bedroom house advertised at $620,000 in a suburb with a $700,000 median house price, negotiated down to a $580,000 purchase.

The outputs

• Total cash needed: deposit + other purchase costs + renovation + contingency + holding costs = $116,000 + $22,000 + $80,000 + $12,000 + $15,100 + $2,200 = $247,300. This excludes the borrowed portion of the purchase and excludes selling costs, which come out of sale proceeds.
• Total project cost: the full cost of the deal, including the whole purchase price and selling costs = $734,700.
• Target sale price: the realistic finished value, based on comparable recent sales, $820,000
• Target profit: $820,000 − $734,700 = $85,300, or 6% of total project cost.

That 11.6% is the figure to interrogate hardest, and the next section explains why.

• Suburb median price: the current median for the suburb, a sense-check for both your purchase price and target sale price.
• Advertised price: the listed asking price. Rarely what you should model as your purchase price.
• Price to offer vendor: the price you actually expect to pay. Swapping this in for the advertised price is one of the more common corrections that turns a marginal deal viable, or vice versa.
• Mortgage/deposit: the split between borrowed funds and your own cash.
• Other costs: one-off purchase costs outside the mortgage, stamp duty, conveyancing, building/pest inspections.
• Renovation cost %: your renovation budget as a percentage, letting you quickly compare a light cosmetic reno against a structural one across properties. Not sure what your renovation is likely to cost? Get a detailed breakdown by quality tier with our Residential Building Cost Calculator.
• Contingency %: a buffer on top of the renovation budget for the unexpected, see below for how much is typical.
• Holding period (months): how long you expect to own the property before selling (or re-letting). Every extra month adds another month of interest and holding costs.
• Monthly loan repayment: your actual repayment during the hold, interest-only is common on short-hold reno projects, since there’s little or no rental income to service a P&I loan.
• Council/water/electricity/insurance (holding costs): the ongoing cost of owning the property while it’s being renovated and not earning rent, easy to underestimate because none of them individually feels large.
• Selling costs, agent commission: the agent’s fee for selling the finished property, typically a percentage of sale price.
• Selling costs, advertising: marketing spend for the sale campaign.
• Selling costs, styling: furniture and styling hire, which can meaningfully lift both sale price and speed on a renovated property.
• Selling costs, legal: conveyancing fees for the sale.
• Selling costs, miscellaneous: compliance certificates, final cleans, small make-good items.

• Total cash needed: the true out-of-pocket figure. Compare it against what you actually have available, with a buffer beyond it, a project that’s feasible on paper is only feasible in practice if you can fund it through to sale.
• Total project cost: the all-in cost of the deal, and the denominator for your profit percentage.
• Target sale price: only as reliable as the comparable sales it’s based on, use genuine recent, similar sales, not what you hope the finished product will be worth.
• Target profit $ and %: your margin for risk, the figure to stress-test, not just accept.

There’s no single “correct” percentage for every renovation project, and we won’t invent one, but two real, sourced reference points are worth knowing:

• The well-known 70% rule used by flippers (purchase price no more than 70% of after-renovation value, minus renovation costs, to bake in roughly a 30% margin) originated in the US and doesn’t map cleanly onto Australia. Industry commentary notes that in competitive Australian capital city markets, investors are often paying closer to 80–85% of after-repair value just to secure a deal, compressing the theoretical margin well below 30% before a single Australian cost (stamp duty, agent commission, holding costs) is even counted (Smart Property Investment).
• A solid contingency buffer (below) protects whatever margin you land on. A thin margin with no contingency is a much riskier project than a thin margin with a solid one.

Treat total project cost as the number to minimise and target sale price as the number to pressure-test conservatively, then judge whether the resulting profit justifies the time, the borrowing cost, and the risk of something going wrong.

• Underestimating contingency. A commonly cited rule of thumb is 10–20% of total project cost for unforeseen expenses, design changes, price rises, issues found once walls come off (Victorian Government, Building Victoria). Budgeting less on an older, uninspected property is optimistic.
• Ignoring holding cost blowouts. Six months can quietly become nine if approvals, trades, or weather cause delays, and every extra month adds interest plus rates, water, electricity, and insurance regardless of how the project is running.
• Misjudging the after-renovation value. Usually the single biggest source of a feasibility study going wrong, because it’s judgment-based rather than a fixed cost. Base it on genuinely comparable recent sales, same suburb, similar size, similar finish, not the best result you’ve seen anywhere.
• Forgetting selling costs. Agent commission, advertising, styling, and legal fees can total several percent of the sale price, leaving them out flatters the profit figure significantly.
• Modelling the advertised price instead of your likely purchase price. The advertised price is a negotiation starting point, not a budgeting input.
• Not stress-testing the renovation cost. Trade quotes move. Re-run the numbers with renovation cost 10–15% higher to see if the project still stacks up if the budget blows out.

What contingency percentage should I budget for a renovation? A commonly cited range for Australian renovation and building projects is 10–20% of total project cost (Building Victoria). Where you sit within that range should reflect the property’s age and condition, whether it’s had a professional inspection, and how much work involves opening up walls, floors, or roofs.

How long should I budget to hold a renovation project? It depends on scope. A cosmetic reno might take 6–10 weeks of work, but your holding period also needs time to buy, time to sell, and a buffer for delays, many investors budget a minimum of 3–6 months end-to-end for a modest project, longer for anything needing council approval.

What’s a realistic renovation profit margin in Australia right now? There’s no fixed industry-standard figure we’d put a number on here, be wary of any source that states one with false precision. What we can say, sourced: competitive conditions in Australian capital cities have pushed many buyers toward 80–85% of after-repair value rather than the traditional 70% rule (Smart Property Investment), compressing margins before local costs like stamp duty and commission are even factored in. Run your own numbers conservatively and judge the result against your risk tolerance and financing cost.

Do I need council approval before running the numbers? Not before, that’s exactly when to run a feasibility study, before you’re committed. If your renovation is likely to need approval (structural changes, additions, some subdivisions), build the likely timeframe into your holding period and the application cost into your other costs.

Should I use the advertised price or my offer price in the calculator? Your realistic offer price. Advertised prices are a marketing starting point; your feasibility study should reflect what you actually expect to pay after negotiation.

What’s the difference between total cash needed and total project cost? Total cash needed is what has to come from your pocket to get through settlement, renovation, and holding, it excludes the borrowed portion of the purchase and selling costs, which settle from sale proceeds. Total project cost is the full cost of the entire deal, including the whole purchase price and all selling costs, and is what your profit percentage should be measured against.

• Not sure what the renovation itself will cost? Get a detailed cost breakdown with the Residential Building Cost Calculator.
• Deciding to hold and rent instead of sell? Model the ongoing numbers with the Investment Property Cash Flow Calculator.
• Get an accurate, state-specific upfront cost with the Stamp Duty Calculator.
• Selling the finished renovation? Check the tax impact ahead of time with the Capital Gains Tax Calculator.
• Renovation and depreciation can interact, see how with the Investment Property Tax Depreciation Calculator.
• Before you commit to a suburb, compare growth, yield, and demand data using SuburbsFinder’s suburb research tools.