In todays economy Australia is buzzing with many optimistic entrepreneurs wanting to make the most of the current housing price plateau by jumping aboard the 21st century renovation bandwagon.
Popular shows such as “The Block”, “House Rules” and “Better Homes and Gardens” are making it easy for us Aussies to assume that renovating your home is a fun, simple and easy job to do with colossal monetary rewards after The Block’s recent grand finale. The winning pair walked away with an astounding $736,000 in profit for a short twelve weeks of hard work – But is this an achievable dream for the average Aussie?
Before you call up your boss and call it quits to become a full-time Blockhead home renovator, make sure you consider these five factors:
5 Handy-Man Hints
1. Ask yourself; Who am I building the home for?
As a renovator it’s essential to focus on what your potential customers will want rather than your own personal likes and dislikes; you could potentially create something which no one will buy. So consider your target markets demographics of house location and income as well as buyer needs to achieve the best return on investment. As a handy hint, we advise not to paint walls white in a family home where there will most likely be children; there is nothing worse than a mural of your face drawn in crayon right next to the family TV!
Do your research, gathering information throughout the whole process of renovating is crucial to your success. The housing market and consumer demand is dynamic and you should be flexible with your approach to cater for this.
2. What if something unexpected happens?
It’s not quite as simple as purchasing a property at a bargain price and then selling it for a monumental figure once the revamp is over. You will need to take into account interest rate trends, your competition, changes in the economy and forecast for possible change in the median house prices for your location.
3. Create a budget blueprint
Managing your finances is crucial to ensure you come out the other side of renovation with a positive return on investment. It is crucial that you budget for the unexpected and have a ‘back-up plan’ for your finances. Also be sure to discuss in detail what your contractors have included in their quotes to ensure you don’t get stung by extra labour or material fee’s once the job is done.
Look at spending around 5% of the purchase price on renovations i.e. if you purchase a house for $500,000; your renovations shouldn’t cost any more than $25,000.
4. Plan, Plan, Plan
Planning sounds like an obvious tip, but you’ll find that small details like contractors schedules are often overlooked. Setting aside planning time on a regular basis is crucial to ensure your revamp runs smoothly.
5. Don’t bypass researching the by-laws
Make sure you investigate Council restrictions before you tighten your tool-belt. Councils have unique by-laws that may impede on your project. Be mindful of noise restrictions- we don’t think your neighbours will appreciate a wake up call from a buzzsaw at 5am!
Becoming a fully-fledged home renovator is not out of reach, it just requires a lot of hard work and dedication. So when it comes to putting your thought out plans into action, consider our 5 handy-man hints before you decide to jump right into things.
The team at SwitchMyLoan wishes you all the best in your renovation endeavours.
Speak to a mortgage expert about your situation today on 1300 307 155
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