Buying a home that needs work isn't for everyone, but the advantages are compelling:
This is where planning is critical. While a kitchen reno can cost anywhere from $20,000 to over $100,000, the biggest challenge is often structuring the finance correctly from day one.
The Deposit Dilemma: Many buyers have a 20% deposit saved but want to hold some of that cash back for the renovation. The problem? If you use that cash for the reno, your deposit on the house itself might drop below 20%. This pushes you into a "high-LVR" loan, which can trigger extra costs like a registered valuation and Lenders Mortgage Insurance (LMI).
A common strategy to navigate this involves using a gift or loan from family for the renovation funds. After the work is complete (usually after 6 months), a new valuation can capture the home's increased worth, allowing you to refinance up to 80% and repay the family loan.
This process has a lot of moving parts and needs to be structured perfectly. It's the number one reason to talk to an adviser before you start looking.
Success with a do-up lies in your due diligence. Never skip these steps:
Once you own the property, focus on "bones before beauty." Prioritise structural repairs, roofing, and insulation first. Then, target your spending on high-impact areas that add the most value: kitchens, bathrooms, and creating extra bedrooms.
Purchasing a do-up property is a powerful way to enter the market and build wealth. It demands hard work and careful planning, but the rewards - both financial and personal - are undeniable.
If you're considering this path and want to understand the unique financing options available, we specialise in helping first home buyers structure these exact types of loans. So feel free to get in touch and let's create a plan to turn your renovation vision into reality.