Renovating has become a bit of a national past time, and popular television shows like The Block continue to fuel our love of renovating. In 2012, Australians spent $6.35 billion on renovations according to the Australian Bureau of Statistics.
Sure, renovating can be highly satisfying and profitable; however there are many risks in the renovating game that you should keep in mind.
It is probably no surprise to learn that renovations rarely come in on budget. To avoid a massive budget blowout, you should engage a quantity surveyor to estimate the cost of construction before lodging a development application with council – this will ensure you don’t end up with approval for a renovation you can’t afford. The quantity surveyor’s fee of $5000 could save you tens of thousands later on.
This is the biggest risk of renovating and it occurs when you spend more on the renovations than the profit those improvements could be expected to bring if you were thinking of selling in the future. If you are planning to live in the home “forever”, this may not be a problem, although it’s worth remembering that you never know when you may have to unexpectedly sell.
A reputable real estate agent can show you how the current market is performing for comparable properties. Use this information in the decision making process.
Devaluing your property
You must keep in mind that any renovations you undertake are completed to a high quality standard and have wide appeal - otherwise you could be losing money, instead of increasing your property’s value.
Not getting the right advice
You need to get the relevant experts to tell you what you’re in for with your particular renovation. Doing your homework will avoid unwanted surprises.
Sourcing reliable builders is also of the utmost importance. Don’t just focus on the cheapest quote – go for the person most capable and look at the quality of their work before you hire them.
Risking your health
If you’re planning a DIY job on your renovations, you need to be smart and put your health and safety first. A survey by Sydney’s St Vincent’s Hospital last year found that 61 percent of respondents who had recently completed their own renovations had been exposed to asbestos. Asbestos was used in products such as carpet underlay, walls and floor tiles in homes constructed before 1987.
Electrical wiring, falling fragments of wall, and potential accidents with power tools are also things to watch out for. Taking all necessary safety precautions is crucial.