renovation costs can blow out quickly for people who donaet plan

Written by The ReReport

RENOVATIONS remain a popular activity as homeowners across the nation try to avoid stamp duty and other expensive property purchasing costs.Australians spent almost $2.1 billion on residential property renovations in the June quarter this year, according to Bureau of Statistics data. Inevitably some renovators will feel like they’re throwing cash into a bottomless pit.Being burnt financially by a renovation project can be a harsh money lesson, but there are ways to minimise the potential pain.MORTGAGES: Home loan rates now go both waysPROPERTY: Why location is crucial for real estate pricesIt all starts with good planning. Mortgage Choice CEO Susan Mitchell said homeowners who failed to plan and did not engage qualified professionals, such as a licensed builder, could overspend.media_cameraThe Scarce family of Burleigh Heads in their renovated kitchen. Bronwyn and Richard Scarce with daughters Tully and Leilani.“Homeowners should factor in a buffer to their renovation budget. For smaller renovations, stick to a 10 per cent buffer, and 20 per cent for a major renovations in order to control costs and avoid topping up your loan,” she said.Ms Mitchell said it was a good idea to get a building inspection before the job started, to identify potential problems such as wiring or asbestos.Compare home renovation loans“Have an honest conversation with your builder before starting any work. Factor in the finer details, which are often overlooked, such as waste removal and landscaping repairs,” she said.Mortgage Choice research found that more than half of homeowners have renovated, with almost 40 per cent saying they did this because it was too expensive to move.Metropole Property CEO Michael Yardney said one DIY job did not create a renovation expert, so people should be careful going it alone.He said finding the right people for the job was vital, and could come from referrals from friends and family, or even the local hardware store, which might have good relationships with tradespeople.Mr Yardney said people who already worked full time should employ a qualified project manager. “Although their fees may add another 10 or so to your overall renovation costs, it likely to be a worthwhile investment,” he said.Bronwyn and Richard Scarce recently completed a major 13-month renovation of their Burleigh Heads home. It went slightly over budget after they made some extra modifications, but there were no nasty surprises.Mrs Scarce said renovators should be patient and expect ups and downs. “Take your time and do plenty of research before you start so you know exactly what you want,” she said.“While it was hell living in our home while the renovation was under way, I wouldn’t have done it differently.“We felt that living on site gave us access to the renovation that we would not have had otherwise.”@keanemoneyOriginally published as Prevent a renovation money pit

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