Renovating instead of moving
As a homeowner, at various stages of your life, you will probably be looking for property of different sizes, in different areas and with different features. But if you’re pretty happy with your location, renovating your existing dwelling may be your preferred option.
Become a developer
Robert Caulfield is managing director of Homesafe Group and has been an architect for thirty years. He says that if people do decide to renovate, they need to consider themselves a developer and even if they were renovating for pure comfort or personal taste, they would be unwise to not think of the value added to the property.
“A person needs to have a similar line of thinking [to a developer] because at the end of their renovation if they’ve done it well…the house should be worth at least as much as it was before and ideally more,” he says.
Just as when you are buying property, when you are renovating you need to try and leave your emotions at the door.
“People need to moderate their way of thinking and not fall for the traps that many people do,” Caulfield says.
A renovation isn’t a capsule into which you put all the ideas of the perfect appliances, colour schemes and fittings. You should first start with an overall concept and then work out reasonably priced options that will fit that overall design.
Even if you don’t have plans to sell in the next five, or even 15, years you should always be thinking about the possible purchase of your property down the track.
Traps to avoid
A common mistake that Caulfield sees is people renovating their home for their own personal changed circumstances without much thought to the home’s value. For example, empty nesters in a three-bedroom home turning their third bedroom into a walk-in wardrobe/ensuite to make their home more comfortable.
“But what they have in effect done, is turn a three-bedroom house into a two bedroom house,” he says.
If a walk-in wardrobe/ensuite is really that important, people need to consider solutions – such as extending – that could retain the three-bedroom home.
When it comes to finishes, don’t go for the highest cost option, unless you live in an area where a high value product will be sought after.
“I think its just using sensible planning and being smart in what you’re doing and not going over the top,” Caulfield says.
Most renovators know not to over capitalise but budgets can quickly run over. To avoid this you need to be realistic in the first place. Make sure you get property costings and quotes and don’t rely on hearsay from a friend of a friend who knows a builder.
You can also get a real estate agent involved to make sure you’re not spending too much. After you have your plans drawn up for your renovation, bring in the estate agent to value the property and ask for a reasonable estimation of what the changes would add to the property’s resale potential.
Also if your renovations are on over 50% of your home, then the entire home will need to be brought up to current building regulations. This can be expensive but it is a more economical way of getting these major maintenance works done than having to do them by themselves.
Caulfield is an architect, so it’s not surprising that he suggests using an architect for a renovation, but he does point out that if you do use an architect, adding “architect designed” can potentially add up to 10% to your property’s value. An architect could cost between 8 to 12%.
So never lose sight of the investment opportunity of your renovation but make sure you enjoy the process as well.