Renovating 4 Tips Uai 258x163

Property renovation is such a close-to-heart topic for us Australians. Who doesn’t have a passion for making their home look more beautiful, attractive, and valuable – all whilst making a profit when it’s time to sell?

If you are purely renovating for your own sense of comfort or luxury, with absolutely zero intention to benefit in the short-term or long-term from your renovation work, that’s well and good.

However, even if you have no intention for a return on your renovation investment, you should have. Every dollar you put in is worth something and having an investor mindset even while renovating your home, has proven to come in very handy.

What you essentially want to materialise is a greater valuation on your property whether you intend to sell it or not. If you keep it, a greater valuation can mean potential to draw equity for further investments. If it’s an investment property, renovation work can (and should) directly and positively impact your cash flow position by helping you increase your rental yield and minimise your vacancy.

Most people get it.

Renovating can come with great benefits but what most people don’t get is that it can also be a waste of money at least for part of the investment. So, the question becomes where and how do you invest in your renovation work so that you maximise your ROI?

Plan it right

So, you have decided to renovate. Great. The most important thing and a lesson many learnt the hard way is to plan first. Plan, plan and then plan. Don’t rush your planning process. The last thing you want is to be in the middle of renovating and something goes wrong and have to pause to redo some work. The first question you want to ask yourself is, are you doing a complete renovation job or, are you cherry-picking certain parts to give an uplift to your home?

You need to get the order of your renovation jobs right from the start. Planning will help you structure the flow and sequence of jobs so that your tradespeople aren’t going back and forth – which will cost you time and money. Once you have the plan ready, run it by someone who knows a thing or two in that area. If you renovate for a living, you can skip this but if not, get some input and a few tips on how you run it more smoothly.

Budget like a CFO

At the end of the day, this is a project and the more you treat it like a business the more it will pay off. I don’t care how small or big the job is, budgeting is crucial and will be a great guide and reference point. Make sure that your budget is based on accurate estimates as much as you can. Get quotes, talk to suppliers, get material cost and add 15% + margin on top for any unexpected cost items. Once you are finished with your budget, compare it to what others have spent on their renovation work. Granted this is not an easy task and you might not be comparing apples with apples but seeing major differences can light up a bulb and help you see something you haven’t.

Now that you have your costing nailed, start thinking about your ROI – which is a factor of your sale price and your renovation expenses. The higher your home is valued after your renovation work, the higher your ROI is going to be. But you don’t want to have sky-high figures that aren’t based on any market reality. Consider and research what other houses sell for in your suburb. Quite often, the upper price limit of an area can put a ceiling on your home price. So, you want to renovate with that in mind to ensure you have realistic expectations and that you don’t over-invest. Look at comparable properties and speak to a few agents to get insights on where you think the price will land after it’s all said and done.

Reflect your personality through the design elements

Our personalities have a significant factor in our choice of home – right down to colour, decor and materials – according to psychologist Meredith Fuller. And that shouldn’t come to us as a surprise. We know that property buying is an emotional process especially if it’s for a home to live in.

A home with a great personality and a great story is a home that doesn’t last for long on the market.

Ever heard the saying “People buy from people”? It applies, especially to property buying. Treat your home like a product you are selling to another individual who is buying it directly from you. There is nothing like a captivating story told through every part of your home. You want your renovation work to make your home’s personality shine and evolve. You also want it to be unique. You don’t want to be just another nice home. You want it to have an intricate blend of your personality, but you don’t want it to be too personal which can get be a potential turn-off and unrelatable.

Be resourceful when it makes sense

A sure way to boost your ROI is focusing on the areas you can work on that will make the biggest impact on buyers while adding the least to your budget. You can literally make a list of all the items you can renovate and on a simple spreadsheet, plot the estimated cost and a ‘buyer impact rating’. Start by sorting out the high and medium impact jobs with the lowest cost. These should take more priority than the rest. Flooring, for example, is a relatively affordable way to transform a property’s look and aesthetic. And so is painting. A good paint job inside and outside your home can make all the difference.

Know when to DIY and when to hire someone. There are certain jobs that if you do, you’ll save quite a bit with virtually zero difference on the final quality or look and feel. And for some jobs, you just can’t risk doing it yourself.

A man’s trash can be another’s treasure. Think about reusing materials in a bi-directional way. You can use others’ materials and you can give your material to others. You can also use your own material and refurbish/recycle them. It takes a bit of creativity, but we’ve seen it over and over. From old bricks to hardwood timber floorboards, you probably have so much that you can use and reuse or worst-case scenario, give away to someone who might need what you don’t.