There’s a lot to consider when deciding whether or not to renovate your first home; from how much you can afford to spend, to how much you should spend – and where.
How much should you spend?
As a first homeowner you should avoid taking risks when renovating and spend conservatively. To make sure you don’t overcapitalise (when you spend more on a house than what you can sell it for) it’s a good idea not to spend more than 5% of the purchase price on renovations.
A well-planned and executed renovation can add up to 10% to the value of your home, especially if you hold onto the property for five or more years.
Should I renovate?
Just because you can afford to renovate, doesn’t make it the right decision. You should consider all the pros and cons before committing your time and money:
- Added resale value.
- Make your home more comfortable and improve your standard of living.
- Invest in quality fixtures and fittings that will stand the test of time.
- Save time and money by renovating instead of re-locating. You can avoid all the stamp duty, agency and legal fees that come with moving by re-modelling your home to suit your changing needs.
- Potential to overspend and overcapitalise.
- May have to move out of home while works are being completed (or live in dust!).
What should I renovate?
For the best return on your renovation spend, you should be selective in your renovation choices. Some common value-adding renovation projects include highly-trafficked rooms like:
Average size: 8 square metres
- Install a canopy rangehood and dishwasher.
- Use stone for surfaces.
- Keep the design open-plan.
- Purchase expensive fixtures and fittings.
- Compromise bench and storage space.
- Use an unusual colour palette.
Average size: 6 square metres
- Install a frameless glass shower.
- Lay floor-to-ceiling tiles – Include a double vanity (if there’s room).
- Make extensive changes to the plumbing.
- Replace a combined bathtub/tub with a shower only.
- Overuse mosaic tiling.
Other renovation works to consider
Average size: 150 square metres (standard 2-3 bedroom home)
Average size: 12 square metres
Deck or Patio
Average size: 9 square metres
Although you might not be able to do it all, if you take your time to select the areas of your home that would benefit most from a revamp, you stand to boost your standard of living – and bank balance.
So finally budget for an additional 10% on top of your planned costs, so you’re prepared for any unexpected expenses.