Make (Lose) an Additional $3M on Your Heritage Project
Mal James
Buy Sell Agent
0408 107 988
mal@james.net.au
OPENING MARKET
- 00Days
- 00Hours
100 AUCTIONS TEST
The Market Feels Good.
Today I was checking out one of the seven homes we are sales mananing with different agents and this one in Hawthorn on its first day:
31 groups through, 12 requests for more information and contracts.
The one above is a land sale with only 10 groups through in 3 opens BUT 6 requests for contracts – its going a lot better than one would have expected last year.
Three new James Buy Sell buying client enquiries this week for substantial homes!
A Brutal Truth About Heritage Estate Returns
Had an interesting chat this week that got me thinking. A bloke rings up and says “Mal, been reading your blogs forever. Bought a block in a period estate last year for $4m and just got my first builder’s quote.”
I couldn’t help myself. “Let me guess – $6m?”
“Exactly! How’d you know that?”
Welcome to post-COVID Melbourne where $6m is the new $3m for a new build, and $3-4m is what you call a “light reno” in our period estates.
“So Mal, what should I do?” he asks.
Instead of blurting out “go back in time and hire a great buyer agent” (though I was tempted), I asked three simple questions:
- “Tell me about your dreams?”
- “How old are your children?”
- “What can you afford comfortably?”
Then I shut up. Dead silence. Fifteen minutes later…
“Mal, you still there?”
“Yep, just listening.”
Here’s what I heard: kids in early single digits, loves the area, and a $10m finished product won’t break the bank. Green light to stay. But if those kids were teenagers, area wasn’t a sure thing, or the budget was tight? Different story entirely. I’d be saying sell and rebuy faster than you can say “heritage overlay.”
A Brutal Truth About Some Capital Growth
“But Mal, what about capital growth?”
If you’re buying and renovating in Grace Park, Tara, Gascoigne, or the Golf Links Estate – any of our premium heritage estates – your capital growth compared to a similar-sized non-heritage home just one suburb over might surprise you.
“What do you mean? These are Melbourne’s most expensive areas!”
One word: Costs or more succinctly hidden costs.
They cost more to buy into, way more to renovate, and unless you time your sale perfectly in a hot market, you’ll get less bang for your buck than that regular house in the next suburb.
Want to know the riskiest thing you can do with your money when renovating?
Hand someone carte blanche on a period home in a heritage estate. Trust me, I’ve seen the 3 casualties of war – the non-starters, the cry-babies, and the “oh no, we definitely didn’t spend that much” brigade.
Three Golden Rules of Heritage Renovation
Am I saying don’t buy heritage? Nope. I probably buy more heritage homes than anyone else around. But there are some rules:
The Teenager Rule: Don’t tackle a major heritage reno if your kids are in their teens and you actually want to see them before they flee the nest. My cutoff? Double digits.
The Business Mindset Rule: Skip it if you can’t handle tough conversations, neighbour drama, or protecting your vision when someone tries serving up their “creative interpretation” of what you asked for.
The Million-Dollar Mistake Rule: The more you hear phrases like “award-winning,” “unique renovation,” or “I’ve never seen anything like this” – the more millions you’re about to lose (on top of what you’re already spending).
Why "Unique" Can Cost You Millions
Turn your $4m land + $6m reno into something too unique, and you're looking at an $8m resale. Play it smart? That same investment could fetch $12m.
The bigger and weirder the reno, the more money you’re throwing away – not in build costs, but in RESALE. Even a decade down the track. A reduce the damage concept that goes out the window once you get past the renovation tipping point where logic is replaced by, oh, f… it, let’s just get it done and who cares what we spend….I’m tired!
You can avoid getting to this with the right advice in the first place.
3 Tips to Protect Your Renovation and Future Investment
Keep Your Floorplan Normal: Weird layouts might impress your one-child family friends, but come auction day? Crickets. Stick to 4 bedrooms minimum unless you’re targeting the retirement market (in which case, focus on single-level living).
Protect Your Yard: Nothing kills family buyer interest faster than sacrificing yard space for a big shiny box extension. On a 750sqm+ block, that rear yard is golden. Don’t let anyone tell you differently.
Go Big on Garaging: When you’re digging that basement, make it count. Every extra car space adds serious value for that special buyer with the classic car collection (and the budget to match).
The Million-Dollar or Many Millions Q & A
“So Mal, what should I do before buying and renovating a period estate home?”
Do the maths and play the percentages. A great buyer agent with period home experience costs 1-2% of your purchase price. Your renovation could cost anywhere from 20% to 150% of that purchase price. That’s up to 130 times the cost of good advice.
Here’s the kicker: That same renovation can add or subtract 50% from your resale value. So your $50k investment in good advice could mean a $3m difference in your pocket – above and beyond normal capital growth. Not to mention saving your sanity.
Unique is OK but play the % - Hire a Great Buyer Agent
Toorak Then and Now
We acted for the Buyer in 2008 and It Just Sold For
Circa $13m
Circa $70m
New Buyers We Are Representing
| Where | Millions | Type |
| Glen Iris Hawthorn | 4.5 | Family Home |
| Hawthorn | 6-8 | New Home |
Glenferrie Road and Burke Road spine $8m to $10m | New Home | |
| South Yarra – Armadale | 6-10 | New Townhouse |
| Malvern East | 4 | Family home double garage |
Mal James 0408 107 988
Simone Clarke 0400 304 111
Buy/Sellers We Are Connected With
Eaglemont's Best
Stewart Oldmeadow 0412 119 277 Liz Walker 0412 659 140
Melina Scriva 0419 348 606 Zali Reynolds 0422 576 049 Simone Clarke 0400 304 111
