Your guide to renovating

From the smallest renovation projects, like replacing cupboards, to adding an extra storey to your home, there are always benefits and costs involved. Take time to weigh up all the pros and cons before you commit your time and money.

Benefits of renovating

• One of the main reasons to renovate is the resale value it can add to your home.
• You can renovate your home to your preferred style, inside and out.
• Renovating can be easier than moving. You can alter your current home to suit your changing needs and tastes. You’ll also save the time it would take to look for a new house, e.g. online searches, attending house inspections and auctions. It also means not having to pay stamp duty, legal and agency fees that all come with buying a new property.
• Renovating can also form part of your tax investment strategy, if the property is an investment home loan. The costs may be tax deductible, or depreciable over a number of years.

Costs of renovating

• With any renovations you undertake, it’s important you don’t over capitalise. By spending more than the house will be valued at once you’ve finished your project, you may lose money in the long term. Our free Property Value Guide can help give you a sense of house prices in your area.
• Costs can blow out if you don’t keep a close eye on your budget. Make sure you have a clear sense of what you want to achieve before you start, and written contracts with any tradespeople you employ.
• Renovating can disrupt your lifestyle, and depending on the scale, require you to move out of your home at certain stages.
• Planning and approval, such as council permits can take a long time.

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Renovate or move?

If you’re not sure whether you want to upgrade your current home or find a new one, these questions can give you a better sense of what’s right for you.

• Are property prices in your area stable, or likely to increase or decrease?
• Is your neighbourhood changing? Does it still suit your needs and lifestyle?
• Are your renovation plans likely to be approved by your local council?
• Will your neighbours be supportive or resistant to your renovation plans?
• Are you prepared to live through any disruptions caused by your renovations?
• What will total renovation costs be compared to the cost of moving?
• How much time do you have to manage renovations compared to moving house?
• Do you have or are you planning on having children soon?

If after answering these questions you feel that moving home is a better option for you, we can help.

The renovation process

Once you’ve decided to renovate, there are some key things to consider at each stage of the project.

Planning your renovations

• Put together a comprehensive budget and stick to it. Consider all the costs involved carefully, and be realistic about what your home will be worth when you’ve finished renovating. You might consider getting an independent valuation of your home before you start.
• Speak to your council early to find out about the approval process in your area.
• Speak to real estate agents to get a sense of what buyers are looking for.
• Take into consideration the style of other houses in your area. If your style is inconsistent it might lower the value of your house.

Designing your renovations

• Consider bringing in an interior designer to help with colour schemes, floor plans, etc. to help make the most of your renovations.
• Increasing floor space in your home is one of the best ways to increase the value of your home.
• Redesigning and renovating your kitchen and bathroom(s) can add value if you’re thinking about improving the livability of your home.
• Make sure any additions you make complement the existing look and feel of your property.

Sourcing materials for your renovations

• Shop around, this way you’ll find the best price on the materials you need.
• Ask friends and family who have done any recent similar renovations which suppliers they used.
• Consider power saving and environmentally friendly materials and features for your renovations, e.g. water saving devices, insulation and energy efficient lighting. These can all save you money in the long term and increase the green credentials of your home.

Project managing your renovations

• Get written quotes so you can compare prices between tradespeople.
• Choose your tradespeople carefully, and make sure they’re licensed to complete the work they’ve been approached to do.
• Make sure you document all of your requirements and get appropriate contracts drawn up before you start any work.
• Draw down funds as you need them. This means you’ll only pay interest on the money you’re using. Our Viridian Line of Credit is great option for doing this. Alternatively, you could apply for a loan increase that has a progressive drawdown option (like our construction loan).

Download a comprehensive guide to managing your renovations.

 

Back to renovating your home

Avoiding renovating pitfalls

 

•  Important information

Applications for finance are subject to the Bank’s normal credit approval. Full terms and conditions are included in the Loan Offer. Fees and charges are payable.