If you like the area you live in, renovating your existing home could be a good way to get the kind of home you want, while staying in an area you know and like. If you’re looking to sell your home, some well thought-out renovations could also add considerably to the sale price you receive.

Things to watch out for

• Renovating can be very expensive.  It’s often harder to work around an existing structure than to build from scratch.
• You can run into unexpected problems, e.g. structural issues that can’t be anticipated before you start.  That can lead to delays and budget blowouts.
• It can be stressful.  You may have to move out for a while (which can also add to the cost). It often takes longer than expected, there are a lot of decisions to make and there are a lot of things that can go wrong.

Be wary of over-capitalising

If you do decide to renovate, be careful not to over-capitalise (spending more on the renovations than you are likely to get back if you do eventually sell).  Here are some things to consider.

• Spending too much for your neighbourhood – location plays a big part in determining property values.  Don’t spend more on your home than the location dictates.
• Unusual or very personal features – they may be important to you but others may not share your views.
• Taking away features – for example, removing a bedroom.

The following are things that will usually add value to your home.

• Renovating kitchens and bathrooms – these are usually the most expensive rooms to renovate because you have to replace appliances, so renovations in these areas are usually seen as a plus by buyers.
• Improving flow – making it easier to get around your home makes it more liveable. An indoor-outdoor flow is also a much sought after feature.
• Landscaping – this can make a big difference to how others perceive your home.
• Better lighting (including more natural light) – this makes your home feel more inviting and spacious.

Starting the renovation process

Here are some things to consider before starting any work.

• Financing – always allow more than you plan to spend, and how you plan to pay for the work. You may be able to top-up your existing home loan or borrow based on your home’s value after the renovations, so it’s a good idea to get a valuation based on your plans.
• Draw up detailed plans of what you’d like to achieve – if you’re making any structural changes it may be necessary to have a draughtsperson or architect make these.
• Make a timeline of what’s going to be done. You may need to use builders, plumbers, electricians and other trades people – this will need to be co-ordinated so that the work is done in the correct order.
• Try to accentuate the best aspects of your home and maximise its potential – you may not need to do as much as you think to improve the feel of your home.
• Look at incorporating energy-efficient materials into your renovation work, such as installing better insulation and energy efficient appliances. This can save you money in the long term, and make your home more attractive to potential buyers. Below is a list of places you can visit for ideas on energy efficiency.

A few energy efficiency ideas when renovating

• Paint your walls light colours. More power is required for the same amount of room light when the walls are dark.
• Think about water heating and usage. Although the exact amount used can vary by geographic region, 29% of a typical household’s electricity consumption is on water heating. Consider installing insulation wraps on your hot water cylinder and pipes. A water saving shower head could also save you up to $480 over its lifetime.
• Insulate. Insulating your walls, ceilings and hot water pipes could save considerable amounts of your heat escaping. In some cases up to 35%.
• Consider a heat pump. Heat pumps transfer more energy than they use, their efficiency can be up to 450% more than other heating types.
• Look for energy star appliances (e.g. washing machines and kitchen appliances). The more stars on the label, the greater the energy-efficiency.

For detailed energy efficiency tips in your day-to-day living, visit the Energy Efficiency and Conservation Authority’s website. There you’ll find a lot of useful information on energy saving ideas for your home and calculators.

All figures quoted in the above section are sourced from the EECA EnergyWise website.

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