8 Practical Tips To Help You Budget On Your Next Renovation
- Don’t move plumbing and electrics.
During a renovation project, it’s sensible to keep your plumbing and electrics in the same place as exorbitant costs are likely to result from moving around your plumbing and electrical work. If you keep things in the same location and freshen it up, then you can cut back on costs significantly.
- Be clear about inclusions and exclusions.
When you get quotes from suppliers, you need to be clear about what’s included and what’s not included — there’s no room for grey area. Insist that your quote includes a list of all inclusions and exclusions. Also, be careful when negotiating for exclusions because what builders charge you to add in certain items may not be the same amount of money they deduct to exclude it.
- Allow for variations.
Generally, a builder will include a clause in the contract to allow or variations or changes to the scope of the renovation work. For example, if the builder discovers that there’s concrete cancer or asbestos halfway through the renovation, they would need to create a variation for costs and the project timeline.
- Don’t get zapped.
Many renovations attempt DIY projects with the hope of pocketing some extra cash, but there are certain tasks that should be left to the professionals. Avoid any structural work and don’t attempt electrics or plumbing — you don’t want to get zapped trying to change a power point.
- Know what you should be forking out for trades.
The cost of tradesmen will form a big part of your renovation budget, so it’s important that you get qualified professionals that quote you a fair price. While it’s easy to compare different itemised quotes offered by tradesmen, you should also do some market research to know what the average cost is for different services in your state.
With a little research under your belt, you will be able to spot the difference between a reasonable quote and a rip off. For instance, if you get a tiler in for a small job and they charge you around $45–47 per hour, then you’ll know you’re on the money.
- Don’t overcapitalise.
When you start a renovation, it can be easy to get carried away and spend a little extra on furnishings, finishes, designs or materials. However, spending extra in these areas will add up and you could risk over capitalising which means it may be difficult to sell the property in the long run. Typically, you shouldn’t spend more than 10–15% of the property purchase price on a renovation project at one time.
This is why it’s crucial that you renovate elements and areas of the property that will add value and appeal to future buyers. As a rule of thumb, avoid spending your funds on low-traffic rooms such as the laundry or rarely-used dining room.
- Don’t take short-cuts.
It may be tempting to take shortcuts if it will save you a few bucks, but don’t give in to this temptation as it will end up costing you in the long run. For instance, if you’re upgrading a bathroom make sure you consult a professional waterproofer to pre-seal your tiles. If you don’t pre-seal them, they won’t be durable and you’ll end up paying more to get them fixed later on.
Like you would with all of your tradesmen, make sure the waterproofer is licensed so they can give you the right accreditation to have it done properly.
- Shop around for finance
Depending on the scope of your project, it’s likely that you’ll need to take out some type of finance to fund your renovation costs. Before you begin the renovation, it may be a good time to conduct a financial audit and clean up any existing debt that you have. You can do this by reviewing your credit file, consolidating debt, or refinancing to a more competitive home loan or credit card provider to make your repayments more affordable.
When you consider your borrowing options, keep an eye out for a competitive rate and a product with minimal annual or ongoing fees.
A renovation or upgrade doesn’t have to cost you an arm and leg. As long as you plan carefully, budget with conviction, and are diligent in your approach, you should benefit from a well executed and profitable project!
Bessie Hassan is the Money Expert at finder.com.au, Australia’s most visited comparison website.
About Bessie Hassan
Bessie Hassan is the Head of PR Australia at finder.com.au
An accomplished public relations professional, journalist and editor, Bessie landed her first job in publishing while at university. After graduating with a Bachelor of Business majoring in Marketing from the University of Technology Sydney, Bessie quickly climbed the career ladder and went on to work for a range of iconic publications with her widely published byline appearing in The Sydney Morning Herald, The Australian, Marie Claire, and Women’s Health, among many others.
A stint in community public relations followed, before heading to finder.com.au. In this role, Bessie combines her interest in the digital space with her other passion – helping Australians find better.