If updating your décor or a fresh coat of paint won’t do, then is renovating your home the answer to making your home more liveable or if you’re selling, will it bring you extra profit? We explore five important factors to help with your decision.
1. Get an up-to-date market appraisal on your home
How much your home is worth may have changed from when you initially purchased it, and it's important to get an independent and up-to-date market appraisal.
Once you know how much your home is worth, you can narrow down the amount of money you plan to spend. After all, it won't make much sense to spend tens of thousands of dollars renovating a property with a low value.
If you’re aim is to renovate for profit, then spending more than 10% of the current property value on an entire cosmetic renovation would eat into your overall profit when it comes to selling. Even factoring in what you are likely to spend on all labour, fixtures, materials and fittings.
“Remember the 20% rule - Assuming you're doing a full renovation of your bathroom and kitchen, a good rule of thumb is to allow around 20% of the total renovation budget for each. So, for a $500,000 home you should spend no more than $10,000 on each. When creating these plans and strategies don't forget, cheap doesn't necessarily mean poor quality. It just shows you're clever about finding the very best deal at every single step of the renovations. All these modest savings add up, and we would all rather a little bit of extra money in our pockets.” Expert renovator and TV personality Cherie Barber
2. Council approval and building certification
If you're thinking of doing renovations or extensions to your property, you'll need to first get council approval and building certification. If you're working with a builder or tradesperson, they'll likely cover the paperwork for you. Some minor internal and external changes, such as utility fittings don’t need approval from council, but major building changes may also require development approval. It’s the applicant’s responsibility to make sure that, if required, development approval is granted before submitting a building application and to ensure the building drawings match.
The Australian Government has a Renovations and Additions Guide that talks through possibilities and requirements in greater detail.
Experts in the area know best, so enlist a professional architect who will have that amazing eye for the potential in your property and will discuss ideas and visions of a transformation that will enhance the aesthetics of both your home and the street that it’s located on. Allowing approximately 10% of your budget on their fees, architects can save you time and money. Are you planning a sustainable or energy efficient design? These are factors that can be considered at design stage.
Simply put, overcapitalisation is when the cost of a home improvement is more than the value it adds to your property. For example, if you buy a property for $500,000 and spend $100,000 on a new outdoor kitchen area with timber decking and deluxe landscaping, it doesn’t automatically increase the property’s value to $600,000. If similar properties in your area are selling for a maximum of $525,000, your eye-popping improvements are unlikely to increase the selling price beyond this – meaning you have overcapitalised. While overcapitalising is never a good idea, there’s no question that the right renovations can significantly add value to a property. Some areas where home improvements can make a big difference include:
- new curtains or blinds
- a fresh coat of paint inside and out
- updating light fittings with modern fixtures
- renovating an old kitchen or bathroom
- refinishing floors and replacing carpets
- adding a carport or garage
To increase the kerb appeal without exceeding your budget, that is key when it comes to renovating. Consider your neighbourhood and the types of features that buyers or renters are likely to be looking for, and be willing to set your personal preferences aside. While you may enjoy having a beautifully landscaped yard or pool, the next person living in the house may not. In other words, it pays to be practical.
From concepts and drawings to final project completion can take anywhere between 3- 8 months depending on the project complexities and construction techniques.
The average home renovation, that is upgrading your kitchen or bathroom and minor cosmetic changes would typically take anywhere between 3 to 8 months of construction time on-site depending on how minor or major the project is.
If you are fully renovating or remodelling your house with second storey additions and extensions, busting down walls and adding architectural details, chances are it could take up to 6-8 months or longer depending on the size of the project. It’s important that your home renovation builder stays on the same page with you throughout the entire construction process to ensure they are constantly aligned with your requirements, expectations and budgets.
So, if you’re ready to dive into a renovation and would like an up-to-date market appraisal on your home, speak to one of our highly trained and experienced Sales Associates in your area.