Consider your current and future needs
Be clear about where you’re at now, and where you plan to be in five or ten years’ time. Are children, or more of them, on the radar? Will older kids be leaving home soon? Will the house still suit you as you get older?
With your needs in mind, map out the must-haves of your dream home versus the nice-to-haves. For example, a second bathroom for your teenage girls may be a higher priority than bi-fold doors to the alfresco.
Look at the condition of your current house
Older homes can present issues that you may not have been aware of until you start renovating. Without careful assessment, what you think is a simple renovation project could prove costly and time consuming.
If you’re considering a renovation, it’s important to look beyond the floor-plan and assess all the hidden elements like the wiring, the condition of plaster, and stumps.
Consult professionals like building inspectors, builders, electricians, and engineers to find out the state of your home. They can give you a price on complex tasks like moving walls or changing rooflines. Good planning and investing in their time now will pay off down the track.
Check out government websites like Your Home and the consumer affairs or fair trading department in your state or territory. And, read our article on renovation costs and budgeting.
Don’t over spend on your renovations
Spending too much money on your renovation, also known as overcapitalising in the real estate world, is where you spend more money on your home than you are likely to recover if you had to sell it tomorrow. Say you bought your house for $300,000, spent $150,000 renovating it and urgently had to sell it for $400,000, you’ll be out of pocket $50,000.
Pay attention to prices in your street and the surrounding area. If the costs of your renovation keeps increasing, and you want to sell soon afterwards, then you may need to rethink your strategy.
But keep in mind that overcapitalising isn’t so much of an issue if you plan to live in your renovated house for the long term. In the article about avoiding overcapitalising experts explain, eventually if you wait long enough your renovation may pay off.
Look around your neighbourhood
As well as costs, also consider whether your planned renovation will meet the needs of the typical buyer in the area. For instance, if your house is far from schools but you want to create a family-friendly home, will you find a buyer with a family when you eventually want to sell.
Explore the real estate market to see if the type of house you’re looking for is actually available in the area you want and at the price you want too. Often decisions come down to whether it’s easier to buy a new house that meets most of your needs or to remodel your own home to your exact specifications.
Do your research and ask the experts
So far, you’ve considered a lot of questions. Remember, it’s important to speak to the experts, get detailed costing information, always get more than one quote, and get referrals or references from trusted sources.