Renovating to add value – Watch out for too much Bling!!

Home renovation is a favorite pass time for many home owners to improve their lifestyle or to renovate for profit. However many people either do not budget at all or grossly under budget for their renovation or extension. When renovating one of the main mistakes people do is to add lots of bling (shiny expense stuff to look good like $4000.00 dollar light fittings) but not to much value. I have seen people pour thousands of dollars into a home renovation and at the time of sale they don’t get all of that money back. So how to do you add value and turn a profit?

How to add value to a renovation

• Always buy right – if you pay too much its a lot harder to get your money back or turn a profit.
• Traditionally – when buying a home people pay for more  floor space – so add or extend.
• New kitchens  and bathrooms add value if done correctly.
• Bling does not always add value but can attract buyers.
• Landscaping adds value.
• Outdoor rooms like decks and BBQ areas add value.
• Set a budget and stick to it (allow 20% over for things unseen).
• Don’t use rubbish tiles, fittings, building materials – it shows.

Plan out your renovation budget

Planning your renovating budget is important if you want to keep your expenses under control and it also forces you to only spend money on what is important. I have seen many people spend over $2000.00 on a bath or vanity and run out of money for the tiles and so haveto buy basic white cheap tiles to save money, when they planned for something better. Another thing for a budget blow outs is finding something during your renovation that you could not see. One time I was renovating a house that I purchased and had an electrician come in to replace some power points. However when he tried to replace the old power points the rubber shielding on the wiresstarted to fall off because the house was built in the 50′s. So all of the wiring had to be replaced because it was really dangerous and $6000.00 later the house has a new power system. The point is this job had to be done but it does not always translate into adding money to the sale price so watch out for unseen problems and have a buffer in the renovation budget of around 20%. Also if you are buying to renovate and sell, things like a bad electrical system and plumbing can be negotiated off the purchase price.

Complete your renovation on or near time

Extra time means you lose rent if you intend to rent it out, extra interest if you plan to sell it or extra mess and disruption if plan to live in it.  The best way of bringing your renovation in on time and on budget is planning.

• Inspect your property and plan what you want to do.
• Put your renovation tasks in order. eg. plumbing and electrical first – plaster and painting last.
• Set a realistic budget for each task – if you are unsure get a quote.
• Factor a 20% buffer for things unseen.
• Plan for the end goal in mind.
• Make sure all you do adds value – watch out for to much bling.
• Match the renovation to the area and house. Don’t use plain substandard materials for a one million dollar house or install a flat screen TV and spa in a ex housing commission house.
• No matter what type of house or budget always do quality work. Cheap rubbish is easily shown up for what it is.
• Plan your tradesmen to start on a date and book them in advance. Always leave a time buffer between them if they are working on the same part of the house or are following each other. Eg plumber to plumb the bathroom leave a day between, then book the tiler.

Home renovation is not rocket science however with some planning and care you can have a smoother renovation and leave with more money in your pocket and a rewarding and quality job well done.

Tagged as: home renovation