A Simple Guide to Renovating Your Home Wisely
Posted by Tristan Angelini on 11 August 2021
There has been a massive increase in interest in terms of going the renovation route, most especially this year. The initiatives that encouraged buyers and builders to buy their very first home or build their house really pushed so many to take that leap. Aside from the initiatives, low-interest rates are really motivating Australians to do home renovations – especially now that the property market prices are breaking records despite lockdowns and restrictions set due to the rise in COVID-19 cases.
The pandemic without a doubt is the biggest driver of change. While others, unfortunately, had to deal with losing a job, others were fortunate enough to save more because of it. Now would be a good time to reassess your plans if you had to hold off on it last year when things started to get a little bit crazy. For example, if you have previously planned on doing some home renovations, the best thing to go about it is to avoid making mistakes that could potentially become a huge problem.
One of the most important things you have to understand is to get the balance right. Spending on the renovations more than the value it adds to the property is a mistake so many are making. But not investing enough in it is also completely wrong. So how can you do this wisely? Here are some things you should know according to building experts.
We say this all the time if you don’t exactly know where to begin, first do some research. It’s important to know the details of your plan and not relying solely on your builder or agent to do it for you. One of the risks of doing renovations is overcapitalising.
So, first, let’s define what it is.
Overcapitalising is spending more money on a new build or renovation than what you would get back should you decide to sell it once it is completed. So many renovators do it and it’s a common mistake at that. Why does this happen? The simplest answer lies with not understanding today’s market value and the value once the renovations are done. When you understand the value, the rest will follow like setting the budget around what you are willing to spend. This will prevent overcapitalising.
Ask yourself, “Will this budget be enough to build the project I have in mind with a great outcome?” If the answer is yes, then proceed. If you have serious doubts about how it will turn out, don’t do it. As much as it pains you to delay again, it’s much better than do something drastic then regret it later on. One of the biggest mistakes renovators do is choosing materials. Don’t go over the top. You can always find high-quality materials without spending way beyond your budget.
Avoid the Risk of Undercapitalising
While overcapitalising is a major error, so is undercapitalising. To be able to do this, you have to understand these things:
- Aim to sell to the broadest set of buyers, not to the upper end of the market because this will limit the number of potential buyers. This will help you ensure the best return on investment.
- Choose materials that are not too cheap and not too expensive either. Again, finding the right balance is key.
- Never forget about cosmetic upgrades such as door handles, switch fittings, floor coverings, and basically things that people don’t often notice unless they pay attention. This will make so much difference especially if you are planning to sell later on.
To be able to renovate wisely is to think about your steps and choosing the right people. You can always complete a project that you are satisfied with without having that buyer’s remorse later.