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10 Tips For Financially Savvy Renovators
Renovations can make a big difference to the look, liveability and value of your home.
Whether you’re thinking of making cosmetic changes, such as a fresh coat of paint, or doing major work in the bathroom, bedroom or kitchen, it’s important to consider what the long-term financial benefits might be.
Here are our top 10 tips for getting the most out of your home improvements.
1. Stick to your budget
First and foremost, it’s important to work out a realistic cost for the work you plan to do – and stick to it. It might seem obvious, but it’s easy to get carried away with expensive fittings when you’re in the middle of a job.
2. Can you DIY?
Can you keep costs down by doing some of the work yourself? Bear in mind that most electrical, plumbing and major building work is required by law to be done by a licensed, insured professional.
3. Maximise the resale value
Do plenty of research to help ensure the renovations you are planning will appeal to a wide number of potential buyers. Aim for practicality and timeless style over fashionable trends to help increase the value of your property in current and future markets.
4. Boost your rental income
Raising the value of your investment property can in turn lead to higher rental income. However, it’s wise to talk over your plans with your managing agent to find out what, if any, improvements will deliver the best returns.
5. Consider the best options for finance
There are various ways to finance renovations, including:
- Tapping into the equity in your home with a top-up loan.
- Using your redraw facility to access available funds.
- Refinancing your existing home loan.
- Taking out a construction loan to cover major works. This type of loan is based on the projected value of the renovated property, so can be quite substantial. The lender pays instalments according to a fixed price building contract and council-approved plans, and interest is only charged on money that is drawn down.
6. Compare quotes
When choosing tradies, remember that cheap rates are not necessarily an indicator of excellence. Seek at least two quotes in writing and ask for references, then make sure you follow them up.
7. Always negotiate
Refine you’re bartering skills by letting contractors know you’re shopping around and asking for their best quote. You could also consider asking them to suggest ways to keep costs down.
8. Protect yourself
Ask to see proof of certification and insurance cover to ensure that any faulty workmanship, defects or accidents are not your responsibility.
9. Rely on family and friends
Try to avoid having to rent or relocate during the renovations, as that will incur further costs. If possible, organise to stay with a friend or family member while your bathroom or kitchen are being renovated. This will not only reduce the inevitable inconvenience and stress on your household, but may also allow the building work to flow more smoothly – and even be finished sooner.
10. Go for quality
Always aim for quality and don’t try to cut corners. Not only could you end up having to pay to repair shoddy workmanship or poor-quality fittings, but prospective buyers and tenants are likely to see straight through it.
Renovating can be a great way to add value to your biggest asset – and it doesn’t have to be a stressful experience. With a detailed budget and some careful planning, you can keep costs under control while maximising the return on your investment.
Need to finance your renovation? Compare refinancing your home loans online or speak to a qualified mortgage broker on 13 19 20.