Renovate, with caution

Client Question:   We love the house you found for us, it is exactly where we want to live.  Now it’s time to renovate. What is the best way to work out what we should do and make sure we are not spending too much?

That’s an exciting step to take! Renovating your home can add both personal value and market value to your property, but it’s important to approach it strategically to avoid overcapitalizing or stretching your budget. Here’s a breakdown of how to make sure you’re making smart renovation decisions:

1. Set Your Renovation Goals

The first thing to do is to clarify your objectives. Are you renovating for your own long-term comfort, or are you looking to increase the property’s value for a future sale? These goals will affect the scope of your renovation. For example:

– If it’s for your own lifestyle, you can focus on areas that matter most to you and your family—kitchen, bathrooms, or creating open living spaces.
– If it’s to boost market value, you want to make sure your renovations align with what buyers in your area value. Kitchens, bathrooms, and outdoor entertaining spaces typically provide a good return, but this can vary depending on your suburb.

2. Budget Based on Current Market Conditions

Renovating without a clear budget can easily lead to overspending. Start by looking at comparable homes in your area. Find out the current sale prices of similar properties that have been renovated and estimate how much value your planned renovations will add. You want to avoid overcapitalizing, which means spending more on the renovation than the value it adds to your home.

In Brisbane, especially in certain suburbs, the market may be quite competitive, but you still want to be cautious. Overcapitalizing can happen if you spend too much, particularly on high-end finishes or additions that don’t resonate with future buyers in your area.

3. Prioritize Cost-Effective Upgrades

Once you have a clear sense of your budget, make a list of the renovations you’re considering and divide them into two categories: **essential** and **nice-to-have**. Start with the essentials—these might include structural repairs, updating aging systems (like plumbing or electrical), or improving energy efficiency.

Then, consider which upgrades will give you the best return on investment. Some cost-effective renovations that usually add value include:

– Kitchen renovations: A modern kitchen is a huge selling point, but be careful not to go overboard. Buyers love functionality and style, but high-end appliances and extravagant finishes may not return their full value.
– Bathroom updates: A well-designed, modern bathroom can greatly enhance your home’s appeal.
– Outdoor spaces: In Brisbane, where the weather encourages outdoor living, a deck, patio, or upgraded backyard can add a lot of value. Again, keep it practical and in line with the overall property value.

4. Get Professional Advice

Hiring a professional can save you a lot of money and hassle in the long run. We recommend engaging a building designer, architect, or interior designer early in the planning process to ensure that your renovation will meet your needs while staying within your budget.

Additionally, it’s smart to get a few quotes from different builders or contractors. This will help you get a realistic understanding of the costs and can help avoid budget blowouts during the build. Don’t automatically go for the cheapest quote—look at reviews and ask for referrals to ensure you’re working with a quality team.

5. Track Your Costs and Be Ready for Surprises

A common mistake renovators make is underestimating the costs involved or not allowing a buffer for unexpected issues. When setting your renovation budget, we suggest adding 10-15% for contingencies. It’s not unusual for hidden issues to crop up once the walls come down, particularly in older homes.

Regularly track your renovation costs as the project progresses to ensure you stay within budget. Many builders offer fixed-price contracts, which can provide you with peace of mind by minimizing unexpected costs.

6. Consider the Timeframe and Disruption

Renovations can be time-consuming, and the longer they drag on, the more expensive they can become due to delays or needing to live elsewhere temporarily. Make sure you have a clear timeline in place with your builder and communicate any deadlines you may have upfront.

Renovating while living in the property can also be challenging. Consider breaking the project into stages or focusing on parts of the house that will cause the least disruption to your daily life.

Final Thought: Don’t Over capitalise

Finally, remember that it’s easy to get carried away with design ideas or new trends. However, not every renovation adds value. If your property becomes significantly more expensive than others in your neighbourhood, you may struggle to recoup your investment. Always keep your broader market in mind and be practical in your approach.

Reach out to our team anytime – collectively we have renovated more than 100 properties, from small cosmetic updates to full scale transformations!  We can help you with practical floor plans, understanding current and end product market worth and potentially save you from making mistakes.

Takeaways:

1. Clarify Your Goals: Know whether you’re renovating for personal use or for resale value, and tailor your plans accordingly.
2. Budget Wisely: Look at comparable homes in your area to set a budget that avoids overcapitalizing.
3. Prioritize ROI: Focus on essential renovations that will offer the best return on investment, like kitchens, bathrooms, and outdoor spaces.

 

Want to know more?  Click Here to find out more about how our experienced Brisbane Buyers Agents can help you.  Or call us or send an email to receive more information.

	Enquiries@propertypursuit.com.au
	1300 726604 or +61 7 3177 3399

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