Case study: renovation play

Kings Meadows TAS: $12K of work, $89K above the purchase price in 7 months

Every number from one of our recent Tasmanian purchases: what it cost to buy and fix, what it earns, what it costs to hold, the return on the client's cash, and what they are really ahead after costs.

Citadel Agency · licensed buyers agency, licence 092247L
Three bedroom weatherboard house in Kings Meadows TAS bought off market for a Citadel Agency client
Kings Meadows, Launceston. Photo: Horizon Property.
$521,000paid, April 2026, off market
$610,000agent appraisal, Oct 2026 (low end)
40%return on cash after costs, 7 months
about $54,000gain after duty, works and holding costs
  1. Bought off market$521,000, 3 bed, 1 bath house
  2. Roof and exterior paintabout $12,000, rented at $520 a week
  3. Appraised by local agents$610,000 to $620,000
In this case study 10 sections
  1. What did we buy?
  2. What was the renovation play?
  3. How do we find a renovation play?
  4. How much cash did the client put in?
  5. What does it earn and cost to hold?
  6. What is it worth now?
  7. What is the real gain after costs?
  8. What return did the client make on their cash?
  9. Why did this purchase work?
  10. Is a renovation play right for you?

In April 2026 we bought a 3 bedroom, 1 bathroom house in Kings Meadows, Tasmania, off market for a client for $521,000. After about $12,000 of roof repairs and exterior paint, local agents appraised it at $610,000 to $620,000 seven months later. Using the lower figure, that is $89,000 (17.1%) above the purchase price, or about $54,000 after stamp duty, the works and seven months of holding costs.

Key points
  • Bought off market for $521,000, rented at $520 a week (5.2% gross yield).
  • Roof repairs and exterior paint cost about $12,000.
  • Total cash in about $135,340, including stamp duty of $19,140.
  • Appraised at $610,000 to $620,000 seven months later.
  • About $54,000 ahead on paper after costs: a 40% return on cash in seven months, from a 17.1% change in value.

What did we buy?

WhereKings Meadows TAS
What3 bed, 1 bath house
Paid$521,000
Rent$520 a week

Bought off market in April 2026. A solid house that just needed a roof repair and a fresh coat of paint.

What was the renovation play?

Nothing flashy. Fix the roof, paint the outside, keep it rented.

What the work cost$12,000roof and paint
Value we expected it to add$30K to $50Kour estimate before buying

How do we find a renovation play?

We look for renovation upside in every property we assess. During due diligence, our buyers agents check four things: the price ceiling in the area, whether the property can be bought below the median value, what repairs or layout changes would add value, and whether the work would lift the rent.

  1. 1Check the price ceilingThe price ceiling is the most buyers pay for a home in that street or suburb, based on recent sales of renovated homes. We want enough room between the purchase price and that ceiling for the work to add value.
  2. 2Buy below the medianWe aim to buy below the suburb's median house price. A good buy price means the value from any work sits on top, rather than making up for paying too much.
  3. 3Find work that adds valueRoof repairs, paint, maintenance or a better floor plan. We cost the work before buying and only recommend it when it should add more value than it costs.
  4. 4Lift the rentWork that adds a bedroom or improves presentation can lift the weekly rent. Higher rent lowers the holding cost while the client owns the property.
ExampleTurning a 3 bed into a 4 bed

A 3 bedroom house with two living rooms. Converting one living room into a fourth bedroom can raise both the value and the weekly rent, because 4 bedroom homes suit more families and tenants. Whether it works depends on the layout, the area and the cost, so we assess every property on its own.

In Kings Meadows, the work was simpler: a roof repair and exterior paint for about $12,000. The goal is always the same: buy below market value, then get the most value out of the property once our client owns it.

How much cash did the client put in?

  • Deposit (20%)
    $104,200
  • Stamp duty
    $19,140
  • Roof and paint
    $12,000
  • Total cash in
    $135,340

Work out stamp duty for your state →

What does it earn and cost to hold?

Rent$520a week
Rental yield5.2%rent each year / price
Cost to holdabout $500a month, after the rent

The rent covers the loan interest. Rates, insurance and upkeep leave the client about $500 a month to pay.

Check your own cashflow → · Work out rental yield →

What is it worth now?

Paid, April 2026$521,000
Appraised, October 2026$610,000+$89,000 (17.1%)

Local agents appraised it at $610,000 to $620,000. We use the lower figure. An appraisal is an estimate, not a sale price.

What is the real gain after costs?

  • Value gain
    +$89,000
  • Stamp duty
    −$19,140
  • Roof and paint
    −$12,000
  • 7 months of holding costs
    −$3,500
  • Ahead after costson paper, not sold
    about $54,000

The extra equity can help fund the next purchase sooner.

What return did the client make on their cash?

The house went up 17%. The client's cash went up 40%, because the bank lent most of the price. That is leverage.

Investor scorecard7 months, on paper
40%return on cash, after costsabout $54,000 on $135,340
17%rise in the property value$521,000 to $610,000
3.8xthe leverage effectcash return vs value rise

On paper returns. Values can fall as well as rise, and leverage works both ways.

Why did this purchase work?

  • The right area. We researched the suburb before the property: rents, supply and what similar homes had sold for.
  • The right property. A house that needed cosmetic work, not structural work, bought below comparable renovated homes.
  • The right work. Roof and paint change what buyers, tenants and valuers see, for a known cost.
  • The full numbers before buying. Stamp duty, works and holding costs were worked out before the contract, not after.

Is a renovation play right for you?

It can suit investors who want to build equity faster and can fund a small amount of work on top of the deposit and stamp duty. It is less suited if every dollar is already committed, or if you want a property that needs nothing done. Results vary by property and market.

See our client purchases → · More case studies →

Sources

General information only. It does not take your objectives, financial situation or needs into account and is not financial, tax, credit or legal advice. Values are agent appraisals from October 2026. Past performance is not a reliable indicator of future performance. Citadel Agency is a licensed buyers agency (licence 092247L).

FAQ

Questions, answered

How much did the Kings Meadows renovation cost?

About $12,000: roof repairs and a fresh coat of exterior paint. Nothing structural, and the house kept earning rent.

How much stamp duty is payable on a $521,000 property in Tasmania?

Using the State Revenue Office Tasmania scale, duty on $521,000 is $19,140: $12,935 plus $4.25 for every $100 over $375,000. Concessions can apply in some cases, such as some first home buyers.

How much cash did the client put in?

About $135,340: a 20% deposit of $104,200, stamp duty of $19,140 and $12,000 of works, before legal and inspection costs.

What return did the client make on the Kings Meadows purchase?

On paper, 66% on the cash put in before costs ($89,000 on $135,340), and about 40% after stamp duty, works and holding costs, in seven months. The property value itself moved 17.1%. The difference is leverage.

What is leverage in property investing?

Using a loan to buy more property than your cash alone would buy. Gains and losses are measured against your cash, so a change in value has a bigger effect on your return, in both directions.

How does a buyers agent decide if a property is worth renovating?

At Citadel Agency, every property goes through due diligence for renovation upside. We check the price ceiling in the area, whether the property can be bought below the median value, what repairs or layout changes would add value, and whether the work would lift the rent. We cost the work before buying.

What is a price ceiling in property?

The price ceiling is the most buyers will pay for a home in a street or suburb, usually set by recent sales of renovated homes. Renovating past it rarely adds value, so the gap between the purchase price and the ceiling shows how much room the work has to add value.

Can turning a living room into a bedroom add value?

It can. Converting a second living room into a fourth bedroom can raise both the value and the rent, because 4 bedroom homes suit more families and tenants. It depends on the layout, the area and the cost of the work.

What is a renovation play in property investing?

Buying a property that needs work, doing targeted improvements that cost less than the value they add, and holding it as a rental. Here the work was roof repairs and exterior paint.

Is an agent appraisal the same as a valuation?

No. An appraisal is an agent's opinion of the likely selling price. A formal valuation is done by a qualified valuer, and a lender's valuation can be lower than an appraisal.

How is gross rental yield worked out?

Divide the yearly rent by the purchase price. Here, $520 a week is $27,040 a year, and $27,040 divided by $521,000 is 5.2%.

Want to build equity faster?A licensed buyers agent will look at your budget, borrowing and goals, and whether a renovation play fits.
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