Finding Undervalued Properties in Melbourne for Renovation

Fancy yourself as being on one of those house flipping shows? There’s something so satisfying about watching a run-down, dilapidated house get a total makeover and look absolutely stunning afterwards.

But even more satisfying? Doing this all yourself, creating a passion project and reaping the profits of a higher sale price afterwards.

A successful flip always starts with one thing: finding a solid yet undervalued property with massive potential.

Here, the specialists at Patrick Leo explain what to look for when finding undervalued properties in Melbourne for renovation:

Zero in on select suburbs

Some suburbs are simply better value than others, and these areas are where you can find a higher quantity of undervalued properties. Understanding key suburb data is the first part of identifying undervalued properties. Assess factors like:

• Capital growth of the suburb in the past 5 years
• Average time a property spends on the market
• Median weekly rents and gross rental yield

Ideally, we’re looking for suburbs that have a decent level of amenity but, when compared to nearby, better-established suburbs, have a lower level of growth (which we expect will change in the near future).

Study the median house price

Next, learning the median house prices of your selected Melbourne suburbs is a crucial part of identifying bargains. Get to know the median house prices of the 5 suburbs you’re most interested in, and expand from there. Perhaps you’re looking all over Melbourne, and you’re not too fussed about location – purely focussing on price. When you’ve found a home that seems to be below the median house price in the suburb, consider the factors of:

• Land size
• Structural condition
• Potential for renovation
• Location within the suburb

Finding an ugly duckling

‘The worst house on the best street’ – something every investor will have heard before. This is what we mean by finding an ugly duckling: a home that isn’t looking very pretty right now, but is in a great spot and has the potential for added value through TLC. 

Be careful when looking for a house that needs work, however. Sometimes, a buyer won’t fully account for all the costs required to repair and renovate the home, and it can work out costlier than initially believed.

Pay attention to the suburb’s infrastructure

Are there plans for a new shopping centre in the area? A new hospital or school? A university? A train line to the city? These infrastructure upgrades usually mean price growth for undervalued suburbs, so always keep your eyes peeled.

With these tips in mind, and with the help of Patrick Leo, you’ll be on your way to finding and flipping your next investment property. Patrick Leo is Australia’s top-performing team of property consultants, helping savvy buyers find undervalued property in Melbourne. Get in touch with our team to take your property investment strategy to the next level.