Renovation can pay if done well
AUSTRALIANS have always been enthusiastic renovators, and the multitude of television programs touting simple home improvements is testimony to this. A quality renovation can add value to a home while also improving your lifestyle.
However, be sure any work undertaken has council approval and is completed by professionals. Cutting corners to save on costs can be false economy in the long run.
If you’re happy with the area you live in, renovating is often far more economical than moving. Building advisory service Archicentre reckon it costs an average of $50,000 to $60,000 to sell up and move. The price can go a lot higher thanks to the impact of stamp duty.
The advantage of renovating is that every penny goes towards improving your home rather than lining the pockets of the state government, selling agents or furniture removalists.
That’s not to say renovating is either cheap or easy. The latest Archicentre Cost Guide shows that a bathroom renovation can cost around $25,000; a kitchen makeover can set you back about $32,000 and renovating a bedroom can cost around $9,000. To see how much your planned renovation could cost, download the Cost Guide from www.archicentre.com.au/cost-guide.
It can be tempting to trim the cost of renovating by cutting a few corners. Bypassing council approval, using unlicensed labour or even taking a do-it-yourself approach to work that should be done by a tradesman, can produce savings.
And it seems plenty of home owners take this approach, with as many as one in three homes believed to feature illegal building work.
But the short term savings could prove very costly over time. In fact, illegal improvements can be downright dangerous. In extreme cases home buyers can be forced to pull down or rectify illegal structures. As the owner of the property you could even be held legally liable for any injuries caused to visitors or tradespeople as a result of illegal building work.
Chances are, you’ll also be financially skewered when you go to sell your home, especially if buyers ask to see the necessary permits and council approvals, or if they arrange a building inspection that shows up faulty work. Securing a sale could mean accepting a far lower price than you’d hoped for. This assumes you can find a buyer at all.
Our homes are often the most valuable asset we have. So it’s worth doing things by the book. Make sure any renovations have council approval and pay a professional to do work that calls for particular trade skills. You can still save money by taking a DIY approach to jobs like painting or decorating.
It may cost more this way but it’s safer and will ensure the expense of quality improvements is recouped through a rise in your home’s value.
Paul Clitheroe is a founding director of financial planning firm ipac, Chairman of the Australian Government Financial Literacy Board and chief commentator for Money Magazine.