There are two main benefits to renovating your property – firstly, you can make it more comfortable and compatible for your lifestyle; and secondly, you can increase the value of your home. The challenge is to find the right balance between these two benefits – if you invest too much into renovations, you risk reducing the amount of profit you would make when you sell.
The 10% rule
One handy rule of thumb is to ensure your renovation doesn’t cost more than 10% of the property’s value. If you are planning an extensive renovation, do your research to make sure you are not over-capitalising. If you are building a substantial extension on a family home, for example, you should regain the value through creating a home that suits your family’s needs for a considerable period of time.
Keep it simple and contained
The renovations that increase the value of a home are generally in the kitchen and bathroom. A future buyer wants to know that these rooms are up-to-date with relatively new fixtures and fittings. The garden is another selling point as potential buyers will be attracted to a healthy, well maintained garden.
Take your renovations slowly, step by step, finishing one room before starting on another. This way, you can keep track of costs and also ensure that your house remains “liveable” rather than turning into a chaotic mess that will be finished one day!
Check for council approval
Before you dive into any renovations, make sure you have council approval. As part of the process, ask your neighbours to check over your plans before you start work. You don’t want the neighbours complaining that your renovation reduces the value or comfort of their home. Sometimes it just means repositioning a window that overlooks the neighbour’s yard, in order to keep everyone happy.
Consider your financing
Depending on your financial position, you could use your equity to finance the renovations, a combination of equity and savings, or you could take out a construction loan. In order to access the equity on your home loan, you need to ensure that the loan includes features such as redraw, line of credit and an offset account (this of course varies based on individual circumstances and needs).
A construction loan is written against the renovated valuation of the property, and the lender interacts directly with the builder, making regular milestone payments and monitoring a schedule. Basically, your lender has a vested interest in ensuring your renovation increases the value of your home.
If you need assistance with an appraisal of your home and to work out what may work best in terms of renovations in your area to ensure it increases the value of your home, contact us today.
By Karl Smith / June 29, 2018
Owning your own home is a goal or dream for most Australians these days, but we all had to start...
Read More
By Karl Smith / May 5, 2018
Like the pride of ownership you will no doubt experience when you purchase your home, we have pride of ownership...
Read More
By Karl Smith / April 5, 2018
Are you thinking of selling your home? You should know exactly what it’s worth before making such an important decision....
Read More
By Karl Smith / March 5, 2018
Buying or selling a home is a complicated process that involves many people. It’s also one of the biggest financial...
Read More
By Karl Smith / February 12, 2018
You may have signed up to a 30-year home loan. But that doesn’t mean your home loan needs to run...
Read More
By Karl Smith / January 30, 2018
Having the right real estate agent by your side when buying or selling a home is critical. So how do...
Read More
By Karl Smith / January 5, 2018
As real estate agents, we take pride in helping families, friends, neighbours and colleagues buy or sell a home. We’ve...
Read More
By Karl Smith / December 20, 2017
One of the most common questions in real estate is “why is that home on the market for so long?”...
Read More
By Karl Smith / November 22, 2017
Lifestyle changes are often the reason behind our decision to sell. Whether you are relocating, have a growing family or...
Read More
By Karl Smith / October 27, 2017
When you calculate that your real estate agent’s commission is around 2-3% of the sales price plus GST, you can...
Read More
By Karl Smith / October 20, 2017
Don't make these mistakes! The rules of real estate are always changing. On the one hand, affordability is hovering at...
Read More
By Karl Smith / October 10, 2017
Your real estate investments are arguably the most important investments of your life – both financially and personally. You are...
Read More
By Karl Smith / October 3, 2017
Your home is perhaps the biggest investment of your life – particularly as it is not just a financial investment,...
Read More
By Karl Smith / September 29, 2017
Whether you are purchasing a new home or an investment property, you are about to embark on one of the...
Read More
By Karl Smith / September 22, 2017
There are two main benefits to renovating your property – firstly, you can make it more comfortable and compatible for...
Read More
By Karl Smith / September 19, 2017
Most people have walked through beautiful model homes and wished their own home had all those modern features. Model homes...
Read More
By Karl Smith / September 4, 2017
There’s a rule of thumb when renovating that you should aim to add three dollars back from every dollar you...
Read More
By Karl Smith / August 30, 2017
As a vendor, you want to get the highest possible price for your property. However, setting an unrealistic price will...
Read More
By Karl Smith / August 23, 2017
There’s more than one way to sell your property – and you may have a preference of how you’d like...
Read More
By Karl Smith / August 17, 2017
Selling a home isn’t quite as simple as sticking up a ‘for sale’ sign and waiting for the buyers to...
Read More
{"slides_column":1,"slides_scroll":1,"dots":"true","arrows":"true","autoplay":"true","autoplay_interval":2000,"speed":300,"lazyload":""}