There are more than a few reasons to renovate your home, the first one being that it increases the value of your property.
However, remodelling can be expensive, especially if there’s a lot of work to be done. ServiceSeeking’s Renovation Consumer Price index found that New South Wales’ mean remodelling expenses rose 2.5 per cent from last year.
While you could refinance your home or take out a personal loan to cover the costs, you should consider ways to keep expenses low. Here are five ways you can do so:
1. Do it yourself
If you have the skills you need to refurbish your kitchen, bathroom or whatever, taking a DIY approach may be a good way to save on labour costs. In addition, completing a renovation on your own can be pretty gratifying.
At the same time, you should be realistic about what you’re capable of doing. Reading a book on how to install plasterboards doesn’t necessarily make you a proper tradie. If you do a poor job, you’ll have to hire a contractor to redo it, thus incurring greater costs.
2. Conduct a buildability review
A buildability review determines the feasibility of a construction project based on the blueprints. Basically, it involves applying construction knowledge to drafting and designing a renovation.
The advantage to taking this approach is that a contractor will assess all the possible expenses associated with a design before finalising it. For example, a builder may visit your home to make a general assessment of your property, learn what you want to do and then help draft a design that adheres to your budget.
Speaking of your budget, review the amount of money in your savings account before approving a design. How much of your existing funds can go into the project or how much may need to be supplemented by borrowing funds?
3. Stick with the final blueprints
Renovating a home isn’t as simple as replacing old features with new ones. Think of your home as a machine. Changing a single cog will affect how it operates. The same concept applies to your home. An unplanned, seemingly minor adjustment may require your contractor to purchase more materials or spend a greater amount of time on the project.
4. Assess material costs
It may be tempting to purchase granite tabletops, tile flooring and other costly materials to increase the overall value of your home, but it’s also important to be practical. Remember that appraisers assess the general liveability of your home when considering its market value.
Prioritising ‘function over flash’ is generally a good option. In short, choose materials that will stand the test of time, even if they’re not as aesthetically pleasing as other alternatives. In addition, ask your builder which products are easier to work with, which could decrease labour costs.
5. Consider setting up a term deposit
This is more of a budgeting tip than it is a way to reduce costs. However, establishing a term deposit account that matures when you’re planning to start renovating can go a long way.
Before putting money away, gather estimates from multiple contractors. Once you choose a reputable builder offering a low bid, move the appropriate funds to a term deposit account. So, if the project is going to cost $5,000 and you want to start remodelling in 6 months, move $5,000 to a 6-month term deposit.
Be aware that some builders may require you to pay a certain amount up front. Speak with your contractor to learn more, and then structure a savings strategy accordingly. Depending on the interest rate offered on the term deposit, you may have a sizeable buffer to help you cover unexpected costs.
If you need help covering renovation expenses, you could look at refinancing your current home loan. This is proving attracting for many borrowers with interest rates currently at low levels. Speak to one of the lending professionals at Police Bank. As we are a member-owned bank, we work for you with low fees, competitive rates and superior service.