The idea of "renovating" is a sweet dream for many Australian home owners. Whether you're thinking about painting one room, or doubling the size of your home, it's important you understand the pitfalls of renovating before you commit financially. Here are 4 pitfalls that everyone should know about.
1. Renovating costs - unknown!
Did you know that renovations can cost double /m² that of new building costs? This due to the unknown issues that may arise during the buildinf works, and always needing to consider the existing building and the sites sub-surface conditions during the build. A good example is the discovery of unseen structural problems, which can be hidden by Gyprock and floor coverings. These structural problems can be caused by active or non-active termites, moisture damage (around showers and windows are common), poor workmanship and the use of inappropriate construction methods.
Our construction cost calculator can help you understand the costs of any renovation or extension you are planning.
2. Time delays - They're going to happen!
Most building projects, especially renovations & additions can take longer than originally estimated.
- Changes - As a home owner you need to ensure that your original renovation ideas are built as you imaged. It is common when construction starts that the home owner truly starts to understand how the build is going to look. At these stages is is important to make quick and well considered decisions and convey these well to the builder. Making changes during the build will often affect the completion date. If you are considering changes discuss this with your builder and ask " will this affect the completion date?".
- Wet weather - Wet weather may cause delays before the sub-floor areas area constructed or before the roof sheeting is installed. So make a few simple choices before you start your build:
- Choose to build during the dryer months of the year, over June, July & August.
- Cover your renovation site with large tarpaulins on rainy days. Remember it may only rain for one day but the time delay usually occurs waiting for the site to dry out.
- Choose trades that are committed to turning up on site on rainy days (it maybe raining at the contractors home but not necessarily on the construction site).
- Managing trades - Managing trades due to changes & tradespeople rescheduling is difficult. Delays on your job (and your tradies other jobs) will affect your build and will create a domino affect onto other trades. So keep changes to a minimum.
3. Not adding value
Replacing old for new
Replace old space for new will rarely add additional value in an average neighbourhood, except if you're adding a new bathroom or kitchen.
If you're planning to hold onto your home for longer than 10 years its different. Undertaking large renovations and additions are worthwhile, but to ensure you're adding value to your home it's a good idea to ask your local real estate agent for their opinion.
Going DIY or hiring a professional
If you choose to undertake DIY renovations remember you must analyse your DIY skills against a professionals. Consider whether your workmanship will add the same value to your home, or potentially devalue your property. Poor paint work or tiling for example can affect the resale of your property.
However if you're handy and have undertaken many DIY jobs in the past then you should recoup the cost of your labour. See our Overcapitalising with Renovations article for more information.
"Just knock the thing over!"
This maybe an option. Quiet often it can be cheaper to demolish an old fibro shack (for about $10,000) than to work around it.
4. Getting emotional
It's difficult not to get emotional and caught up in a new home or renovation, but it's vitally important to view your build as a business transaction with emotion tacked on the end. Making decisions based purely upon emotion will blow your budget.
The best way to start your renovation is to talk with industry professionals such as a builder, building designer or an architects. If you are well armed you will have a much better chance of minimizing the renovation pitfalls.
Related article: Home renovation case study
(Excerpt) "Everyone had reminded us that it's not easy making money from "investment renovating". Many had failed miserably, some tragically. We realized, however, that we had one advantage over most couples; only one of us held the title to our home. That meant the other could buy and sell another house in his or her name. For couples who like renovating for profit, having the title of your home in one name is a very favourable situation in which to be, and possibly one to work towards.
One of the main considerations was find a house in which one of us could live during (say) 9 months of renovation. Then, assuming sale and settlement took 3 months, it would be sold 12 months after purchase and capital gains tax would be halved. See more...