RENOVATING! WHEN & HOW MUCH?
Updated: May 11, 2021
The writer, philosopher, scientist, politician and one of the founding fathers of the United States of America, Benjamin Franklin, is known for the quote, “If you fail to plan, you are planning to fail”.
So why don’t most families plan their renovations when they are planning the purchase of their next home?
WHEN IS THE RIGHT TIME TO RENOVATE?
Most people decide to renovate on the go, in other words, when they are about to have a child or when the bathroom starts falling apart.
Ultimately the best time to renovate is when you are ready.
But what if I could tell you a secret for the best result? Well stay tuned, and I will reveal some of the greatest secrets to successful renovations.
So when is the best time to renovate? It is when you first buy your home. Of course, this depends on how much you can borrow.
WHAT DO YOU WANT TO RENOVATE?
However, when you have narrowed down your list of preferred homes that you are looking to buy, consider what you would like to renovate, for example:
• Landscaping with or without a pool
GET A BUDGET ESTIMATE
Organise a builder or the relevant trade to inspect the home with you so you can obtain a “budget” price for the renovations, then see if you have the capacity to borrow the additional amount.
COMPARE THE MARKET
As a comparison, look at what the price would be to knock down and rebuild. Depending on how much you want to so, renovating can sometimes be more expensive than building a new home. There are many project home builders that offer this service but be careful of added extras. As a rule of thumb, whatever price they give you, add 20% contingency.
WHY BEFORE YOU MOVE IN?
So why is it best to renovate when you first move in,
It is easier to renovate before you settle in
The longer you take, the more chances that other things will become priority in life
Your financial return will be greater initially and in the long term, remember, house prices tend to double every 7 to 10 years
HOW MUCH SHOULD I SPEND?
So how much do you spend?
The best way to know is by doing a comparison of homes in your area that have been renovated and how much they sold for.
A renovated home in your area recently sold for $1,500,000
Your are buying your home for $1,200,000
The difference is $300,000
So that is your budget
This makes sure that you do not over capitalised, which means you are spending more than the house would be worth. Our recommendation is that you do not spend more than you can afford, and more than the house is potentially worth at the time that you are doing it, not in 5 + years. This is in case you have to sell.
Of course, you could stagger the renovations, and if this is what is best for you, then plan to have it completed within the first 3 years, then you can enjoy your new home sooner and make the most of your property value in the future.
If you are thinking selling your home, and would like my 27 years of experience, hit the learn more button.