In recent times, there has been a groundswell of reports indicating more Australians are seeking to renovate their homes or add improvements.
Westpac’s ownership spokesperson, Andy Wright, told RateCity that: “Those who are reaching key life milestones, such as getting married or having a baby, may also be increasingly choosing to renovate.”
Alternatively, growing families also seem to be purchasing properties that need some TLC, with plans to upgrade in the future when savings have increased, Andy added.
Moreover a few home improvements can be a fantastic strategy if you’re considering selling a property any time soon. When potential buyers are viewing several properties in your patch, you’ll want your house or apartment to stand out for the right reasons.
The explosion in the find-a-tradie websites and apps means it is even easier to find a builder for a renovation, a chippie to extend a deck or an inground pool installer.
Upgrading or renovating
Renovating or moving is an age-old argument, with some arguing the costs of shifting homes make a renovation a viable option. However, building costs in some parts of Australian have risen exorbitantly in recent years with many tradies able to charge higher fees due to demand for their services. Tradie apps such as Rapid Reno Mate, Get Quote and many more will come in extremely handy for managing the costs of a home refurbishment.
Moreover, you'll need to have your financials in shipshape order and have some knowledge of the building process before you start construction. If you're new to renovating, consider whether it's a process you would enjoy? If you have a young family, you will possibly need to move elsewhere, which will involve additional costs.
Then there are the practical matters. Is it viable to renovate your house? Take an old weatherboard house requiring a great deal of maintenance work before you even start. In this case, a renovation is probably not the answer. You don't have to be Scotty Cam to know the old house will need more of your hard-earned to achieve a quality renovation. In this situation, a property sale will probably be the only option. Moreover, once you start an improvement, often other aspects of the older home will need to be knocked into shape - and this additional expense is unanticipated.
Furthermore, when renovating you might need to comply with current building regulations. This additional red tape and expense might require you to install new wiring, plumbing, and insulation, and the cost of these additions can be significant.
There’s also the risk of over-capitalising on your renovations. Over-capitalising occurs when an improvement costs more than the value it adds to a property. Moreover, fixing an overcapitalisation isn't simple. You could sell the property and take a loss or hang on for an extended period and wait for inflation to catch market values up to the amount of your property. In a slow market, this strategy can take a long time.
Whether you're renovating your home for lifestyle reasons or for a future sale, it might be best to talk to your local Raine & Horne real estate agent to help you finetune your goals and strategy.