February 18, 2015
Almost 50 per cent of Australian homeowners intend to renovate their property in the next 12 months, according to Mortgage Choice's latest Happy As Index.
Across the country, one in three respondents said the bathroom was on the top of their ‘to do' list, although for homeowners in South Australia and Western Australia, 35 per cent and 34 per cent respectively said kitchens are at the top of the list.
Mortgage Choice spokesperson Jessica Darnbrough said it was likely that television programs such as the latest season of The Block would motivate Australianstokick start their own home renovations early in the year.
Of course before any renovations are started, Ms Darnbrough said it is critically important for homeowners to research the costs involved and prepare a budget as well as a timeline plan.
“Regardless of whether you are looking to make small cosmetic changes or demolish an entire room, you need to budget for the renovations and determine exactly how you will fund the project from the get-go,” she said.
“Depending on the scale of the renovations, there are plenty of ways a person can fund the process, from using their savings, to a loan top-up, refinancing their mortgage or even a construction loan.”
Commenting on the rooms Australians should be looking to renovate, Ms Darnbrough said whether you are looking to renovate your property for profit or renovate for lifestyle improvements, you are likely to see the biggest return on investment from sprucing up the bathroom or kitchen.
“While these tend to be the more expensive rooms to renovate, by budgeting you can ensure the cost of the renovations is less than the value they will add to your property,” she said.
For those looking to renovate their home on a budget this year, here are a few pointers to help keep costs down while adding value to your home:
Get your hands dirty: Don't hire a tradie if you don't need to! Even if DIY isn't usually your thing, doing some of the easier tasks yourself (like painting, replacing door knobs or handles and applying wallpaper) will help you put more money towards those rooms requiring bigger renovations.
Expect the unexpected: Inevitably, costs you don't plan for will crop up during renovations. It might be that a sun shower ruins insulation you left outside or your paint choice turns out to be a mistake. Because you don't win a few thousand dollars each time you complete a perfect room, like those renovators on The Block, it is a good idea to keep a budget buffer to avoid a blow-out.
Mates' rates: While no one likes to take advantage of their friends, those with the right skills are normally happy to help a mate out if and when needed. Whether that means helping you buy materials at a discounted rate, or giving up a few hours of their time on a weekend to help with demolition, every little bit counts.
Don't forget about the outside: If you are renovating for profit, don't underestimate the significance of street appeal. While The Block usually delays ‘exterior week' to the very end of each season, potential buyers may make up their mind before stepping through the front door. A fresh coat of paint on the exterior or maintaining a manicured front yard, are likely to be cost effective quick fixes.
To help make the right financial decisions when renovating, it is a good idea to seek help from a home loan expert.
If you would like learn more about your home loan or financial advice options, call 13 77 62.