Renovating your property is a great way to potentially drive up its value. If it’s an investment property, you may also secure a better rental return. However, before you dive in, it’s important to weigh up the costs versus the benefit of renovating.
Here are a few pointers to help you decide whether renovating is the right choice for you.
Work out your goals
Before renovating, think about your long-term goals.
- If it’s your home, do you want to stay put in the neighbourhood or are you likely to want a change of scenery in the next few years?
- How does the prospect of selling and moving on compare to renovating and staying put?
- If it’s an investment property, is the financial outlay of a renovation likely to pay off (tip: talk to your financial advisor or a property expert about your investment strategy).
Create a budget for renovating
How much is it going to cost to turn your daggy yet loveable 1960s fixer-upper into a modern masterpiece? Plan your renovations and put together some costings.
The general rule of thumb is to spend no more than 10 per cent of your property’s value on renovations.
To help give you an idea, here’s how much you can expect to pay to renovate areas of your property that commonly add value for resale.
If your kitchen benchtop is an antiquated electric blue and your appliances sound like they are going to take off when you turn them on, it might be worth looking into a kitchen upgrade.
It’ll cost you, but it may be worth it if your goal is to sell your property eventually.
According to Hipages, expect to pay the following for your kitchen reno:
- $10,000 to $22,000 for a small or budget kitchen
- $22,000 to $35,000 for a mid-range kitchen
- $35,000+ for a high-end kitchen.
A flash new bathroom could be a real drawcard for future buyers or renters.
Depending on factors like the size of your bathroom and the materials you choose, you may be looking to pay anywhere from $10,000 to $30,000+ for a bathroom renovation.
The Housing Industry Association found the average bathroom renovation cost $17,000 in Australia.
A new coat of paint can do wonders for an ageing property.
The cost depends on the size of the property, whether you are doing the painting yourself or getting someone else in and which areas you paint (inside and outside).
According to Hipages, the average cost to paint the interior of a property (single undercoat and two finishing coats) is about $20 to $30 per square metre.
As a starting point, for a two-bedroom unit, that might work out to $2,500 to $3,500.
For an exterior paint job on a two-storey property, you may be looking at $5,500 to $20,000. For a roof refresh, expect to pay anywhere from $2,800 to $4,500.
How will you finance your renovations?
There are all sorts of different ways to finance your renovations. That’s where we come in.
You could top up your current mortgage or refinance to fund your reno project.
Using funds in an offset account or making the most of a redraw facility could be another option.
In some instances, a construction loan or personal loan may work best.
These are all valid scenarios but it’s important you speak to your @Finance lending specialist first so we can run you through how each of these finance options works, and which may be right for you, based on your individual financial situation and goals.
Considering renovating? Speak with our lending specialists today so we can give you the right advice on how to achieve it. Call us on 1300 469 840 or send us an email to start the conversation.