Our top 5 renovation planning tips ( from our friends at Transformations Australia)
The single most important stage of any renovation is the planning phase and if I were to break that down, it would include these key ingredients;
- Value – working out what a property is worth now and is likely to fetch post renovation. This really dictates how much you have to spend and how not to overcapitalise.
- Renovation scope- developing a plan for each area so, you know what needs doing and which trades are required. To meet a tight budget, work out what you can’t live without and shave on the rest if necessary.
- Budget- getting accurate quotes and working out your contingency, so you have a buffer.
- Scheduling- reducing dead time saves you dollars and stress. Keeping everyone in the know about when they are required creates harmony and keeps variations at a low.
- Courtesy, kindness and communication- particularly important if you want to make a career of renovating for profit, these considerations will have trades lining up to work with you again.
From a financial point of view consider the following
- Avoid overcapitalising; the cost of renovations normally adds at least equivalent value to a property, and lenders can take this into consideration when establishing finance. However, be conscious to avoid over capitalising as valuers will have a limit on the maximum amount they will attribute to the renovations. For example, granite bench tops and porcelain tiles could be a great investment for an executive residence, but for a modest rental unit may not be appropriate.
- Weigh up your return on investment; will the cost of the renovations have a benefit in either significantly increased rental returns, ease of renting the property, or potential resale value? This of course becomes less of an issue if the renovations are for your long term residence, but should still be considered as your situation could change.
- Budget for unforeseen circumstances; while you may make your best efforts to ascertain costs associated with your renovations, it’s often a case that plans may change mid project, especially if structural issues are discovered along the way. Lenders recommend that you allow at least 10% of the project cost for these contingencies.
Finally tips on where to focus your renovation dollar
- Adding street appeal; whether you plan to sell next month or in five years, any external renovations should create great street appeal. For prospective buyers, their first street front impression is everything and freshly cut lawns, mulched garden beds and a fresh coat of paint can make a massive difference. Prospective buyers will form an opinion of your home before they step inside the front door, so make the first impression count.
- Kitchens and bathrooms; Home buyers rate these as the areas they pay most attention to. Great kitchen and bathroom renovations add the best bang for buck in terms of returns on your renovation dollar and increases in property value.
- Creating a clean, fresh and uncluttered look; whether it be through increasing the amount of storage you have, incorporating clever storage ideas in existing rooms/areas, de-cluttering, rolling on a fresh coat of paint or giving the place a good scrub, this look appeals to prospective buyers time and time again.
Houspect Buy, Build and Invest with Confidence
08 9240 8855