Deciding to renovate your home can be daunting, requiring careful consideration of various factors. As a homeowner, weighing the cost benefits and planning your renovation project is crucial. Whether you aim to raise your property’s value or infuse a personal touch into your living space, renovations often come with a substantial price tag, leading to a potential debt. Fortunately, working with a mortgage broker can help you navigate this process while aligning with your long-term goals. Continue reading below for tips on a successful home renovation.
Laying the Foundations: Assessing Your Renovation Needs
With a knowledgeable broker by your side, the first step is to determine the necessary borrowing amount for your renovation project. It’s essential to outline the specifics of your plan, including the average renovation costs in your area and your borrowing eligibility. Limiting expenses to no more than five per cent of your property’s value is also generally advisable.
Suppose your renovations will likely render your living space unusable during the process. In that case, it’s crucial to consider the additional accommodation costs for the renovation period. Make sure to factor this expense into your budget.
Maximising the Value of Your Home
When renovating to enhance your property’s value for resale, it’s vital to focus on areas that offer the highest return on investment. Let’s explore the average renovation costs for key regions, considering that prices may vary based on your city and suburb.
As avid viewers of the popular show “The Block” would know, kitchens sell houses. Realestate.com.au says the average kitchen renovation cost ranges between $12,000 and $16,000. Creating an appealing and functional kitchen does not have to cost an arm and a leg.
Given the high foot traffic, a well-designed and well-maintained bathroom is crucial to attracting potential buyers. With the average bathroom size in Australia being six square meters, you should budget around $9,000 to $12,000 for a bathroom renovation that appeals to various investors.
Additional bedrooms or a well-designed deck can significantly enhance your property’s appeal and improve your quality of life as a homeowner.
Account for Additional Renovation Costs
As you near the end of your renovation journey, it is important to consider council fees. Typically, these fees can amount to $2,000 for an application, although prices may vary. Once you have consulted with your mortgage broker and finalised the plans, allocate an extra 10 per cent of your funds to account for any unexpected costs that may arise.
Deciding on the Right Loan for Your Renovation
After careful assessment and investigation, if you decide to proceed with your renovation project, there are three types of loans to consider: a line of credit, construction, or increasing your existing home loan. Each option has benefits and considerations, so it’s crucial to consult with our experienced team at Simplify Finance to ensure you make an informed decision.
Ready to embark on a successful home renovation journey? Contact us to learn more and receive tailored solutions that align with your financial goals.