April 04, 2016
About one third of Australian homeowners have said that renovating their home is high on their agenda within the next 12-months. Not only does renovating a home significantly improve its value, but it also allows homeowners to stay at their current address for longer.
As property prices continue to rise across most capital cities every year, many people find it cheaper to renovate their home rather than buy and move elsewhere. Homeowners have made friends in their neighbourhood, children go to the local schools, and are comfortable with the transport and local shops, so renovating to upgrade instead of move is more valuable emotionally.
The majority of people want to renovate their kitchen or bathroom (or both) as these areas add significant value to a property once completed; but these are the two rooms that can be costly and render a home rather unliveable for a short period of time.
As I’ve renovated both my bathroom and kitchen in my Victorian home, I physically saw the number of trades that are involved – electricians, plumbers, tilers, carpenters and others (and all at the same time!) I did have a budget and a signed Builder’s Fixed price agreement; however, little things crept in (especially the kitchen) in wanting a new Fisher Paykel range-hood; an extra cupboard built out of a wall; huge glass splashback; and extra painting required). In fact, my old outdated bathroom and kitchen became modern, lighter; and easier to use – even to adding a free standing bath to a very small bathroom. The huge splashback in the kitchen even reflected the trees and rear courtyard, bringing an unexpected but great look to the stove area.
I’d like to offer the following tips:
- Set a budget. While it can be difficult to stick to a budget during the renovation process, it is still important to set one. If you are hiring a professional to complete the renovations, make sure you source several quotes from different builders as this will give you a clear idea of how much you could be up for. Also consider if you have to move out of your premises during the renovation and need to secure short-term rental – need to add in these costs.
- Plan for the unexpected. Even if you are hiring a professional who is happy to be locked into a fixed price for their services, it is inevitable that costs you don’t plan for will arise. Even to such things as your choice of paint colour; extra timber (noggins) that may be required in the bathroom (even to my example of the new range-hood and splashback).
- Work out your financing. Once you have sorted out your budget, it’s time to plan to finance your renovations. Will you use the cash you have in your offset account, or perhaps redraw any surplus you have saved in your home loan? Perhaps you may need to internally refinance your home loan to use the equity you’ve built up as your property has increased in value – that’s where your mortgage broker is a fantastic help to you to fund your renovations.
- Ask for help. No-one likes to take advantage of their friends and family, but it’s always a good idea to ask for help where possible such as sourcing a product discount, or perhaps someone can help with the demolition (if not included in the builder’s quote). And always ask your mortgage broker if they know of specific companies or tradies, or your broker as they would have assisted with many renovation loans, and often know many stories that went with the renovation process.
- Take a deep breath. Renovating your home can be a little stressful, so it’s important to know what you are getting yourself into before you start – do your research, speak to friends and your broker, and people who have been through this before. Visit open for inspection homes where you know the owners have renovated as this not only gives some great ideas to see first-hand, but will help you when working out your budget, and knowing exactly what you want. Don’t forget to visit places such as Reece in Nunawading to get an idea of how much taps, baths, vanity units, shower heads etc will cost. Even visit places like E&S Trading in Moorabbin to look at the different oven-tops, stoves, range-hoods etc.
For more information on finance options, give our Mortgage Choice Port Melbourne office a call on 9646 7973 or 0402 884 506.