Start with the return, not the budget
Investors often start by picking a figure, then deciding what it buys. Reverse it. Start with the gap between your property and the renovated comps in the suburb, then spend only what is needed to close that gap credibly. The budget is an output of the strategy, not an input.
As a working anchor, most strategic rental renovations sit between $10,000 and $100,000, and the goal is a 2x to 3x return on the renovation spend in combined equity and rent.
The over-capitalisation trap
Over-capitalising means spending past the point the market will pay back. It happens when you renovate to your own taste, add features the suburb does not reward, or push the finish above the renovated comps band. The extra dollars rarely come back at valuation or in rent.
The discipline is to match the renovated standard in the area cleanly and durably, then stop. More spend beyond that point is consumption, not investment.
When the answer is do not renovate
Sometimes the numbers say the best move is to keep your money. If the asset, the suburb or the regulations do not support a return, a renovation destroys value rather than creating it. A genuine feasibility check has to be willing to reach that conclusion. Perch regularly advises owners not to renovate when the numbers do not stack up, which is the point of a complimentary feasibility assessment before any spend.