The good, the bad & the ugly
You are probably reading this article because you believe your home needs improvement. But have you looked at all the issues surrounding renovations like cost, time and inconvenience (not to mention other factors)?
Costs
Did you know that on a per square metre basis renovations can, and often do, cost more than double what it costs to knock down and rebuild? This is true because it is usually impossible to predict the complications that inevitably occur. A good example is the discovery of unseen structural problems which can be hidden by gyprock or plaster. These structural problems can be caused by termites, moisture damage or shoddy workmanship inherited from previous owners.
The problems listed above are just some of the reasons it is often worthwhile hiring a bulldozer and demolishing the existing structure. But please note: extensions do not cost as much as renovations. Extensions cost the same, on a per square meter basis, as a new home. Our construction cost calculator can help you estimate the cost of any renovation or extension you are contemplating.
Time & inconvenience
Almost all building projects take longer than originally estimated. Wet weather might cause delays, or it could be scheduling problems with tradespeople; it is impossible to predict all the complications that will occur. So make plans to move out and live somewhere else or make sure you have access to an alternative facilities if it is just bathroom or kitchen renovations.
Other factors to consider when renovating
- Renovations rarely add additional value to your house. What you put in is what you get out. So make sure you enjoy the fruits of your labour before you sell. The exception to this is when you do-it-yourself (DIY). If you're handy then you should recoup the cost of your labour, at a minimum. See our Overcapitalising with Renovations article for more information.
- On the positive side (and at the risk of being corny) renovations can turn a house into a home. They add a touch that is uniquely your own. Just make sure that you watch that bottom line. Buying a house in Australia is already far more expensive than in other rich countries like Canada and the United States.
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.
Click the following link for the complete renovation case study article.
Sponsors
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For a complete range of construction materials, suppliers and trades professionals see buildingchoice.com.au. This all-in-one website caters for walls & ceilings, insulation, bricks and much more. |
Further reading
Renovation articles
DIY articles