We are a nation obsessed with home renovations.
Just take a look around at your own street or suburb, or turn on the TV to see the number of home makeover shows on offer.
Housing Industry Association research shows that house-proud Australians are expected to have spent more than $30 billion on renovations in the three years to 2016-17.
And who can blame them?
Renovations, when done correctly, can enhance the look and feel of the space, as well as add value.
But a lot of DIY renovators get it wrong, and that can be disastrous.
Not only does the place end up looking terrible, but they may not have added any value to the property
Here are some of the most common bloopers:
1. THEY OVER-CAPITALISE
By far the most common trap for home renovators, over captalisation occurs when the homeowner spends more money than they could legitimately recoup at sale time.
You can see how easy this is to do: you get excited by the renovation process, splurge a whole heap of money on fixtures and extras, and before you know it you have blown your budget.
I also see it a lot with second-tier properties.
Just say you have bought a house on a main road — which I would never recommend — and then you decide to add an elaborate extension on the back.
When you try and sell the property a few years later, you discover that the main road keeps a lot of potential buyers away and your property is not in hot demand.
You then struggle to get enough money for the home to make the renovations worthwhile.
2. THEY DO IT ON THE CHEAP
Occasionally I will walk through a home and ask myself, ‘What was the owner thinking?’
The fixtures are cheap, the cabinets are cheap, and the painting is shoddy and obviously a DIY job.
Prospective purchasers will notice these things, so even if you are happy to live with inferior paintwork or cheap fixtures, this does not mean others will.
You don’t need to install a commercial kitchen or the latest Bosh appliances to appeal to buyers, either, unless of course you have a generous budget and in which case, the sky is the limit.
But if, like most people, you are on a budget, always try and ensure that you buy quality appliances.
They need not be the most expensive, but try and avoid the cheap and nasty.
3. THEY DON’T BUDGET
You would be surprised by how many people, many of them extremely competent in their professional lives, don’t draw up a budget for their home renovation.
This is of the utmost importance, especially if you are undertaking the project yourself.
Cost your labour and your materials first and then add them to the spreadsheet.
Also factor in costs such as building delays and time spent away from work due to the renovations.
Make sure you add a buffer, too, for the unexpected.
If you are not an experienced renovator and you have a budget for $30,000, I would add $10,000 to that as a buffer because unforeseen things always come up.
4. THEY FOLLOW FADS
Some renovations work beautifully, others will leave you scratching your head.
Why did they think that cheap granny flat would add value?
Why on earth did they not use masking tape around the windows when painting?
The most common reason a renovation looks terrible is because someone has seen something in a magazine and decided they wanted it too, even though it does not suit their property.
Take butler’s pantries, for example.
They are on the wish list of many a home renovator but the floorplan needs to be right.
There is no sense in wanting one if you live in a two-bedroom apartment.
When renovating make sure you ask yourself what would suit your property, as well as your budget, before copying an interior design trend.
5. THEY ASSUME POOLS ADD VALUE
They are great in theory, but can be a nightmare to maintain and they don’t always add value quite the way people think.
A Swimart survey found 90 per cent of pool owners believed their pool boosted the value of their house by an average of $30,000; with estimates ranging between $10,000 and $100,000, depending on size, style and location.
But pools need to be subtle and not overwhelm the rest of the home.
Furthermore, it needs to suit your neighbourhood.
If it is standard for similar homes in your area to have a pool, then it will mostly likely enhance your sales price, but if pools are a rarity in your suburb then this could work against you.
6. THEY INDULGE IN VANITY PROJECTS
Finally, a word on vanity projects.
These are the renovations that make no practical sense and detract value from a home, but are done on the whim of an owner.
You may have always dreamed of a giant marble statue in your backyard, or have a particular interest in feature walls with words written on them (this I have seen), but you should be aware that other people are unlikely to share your passion.
There is nothing wrong with putting your own stamp on things, just be aware of the consequences if you intend to sell.
After all, one man’s glorious man cave is another’s eye sore.
WHAT CAN YOU DO TO STAY AHEAD?
As signs point to softer growth conditions for Australian property over the coming months, independent professional advice and careful consideration will be as important as ever in navigating Australia’s varied market conditions.
If you’re looking for independent advice, no one can help you quite like the independent property investment strategists at Metropole.
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