Mistake 1: Not doing enough research
Don’t start work without knowing the details. You need to research building materials and tradespeople, and understand the legal and regulatory aspects of a renovation. Find out how much materials and tradies cost. You can request several quotes to get a realistic price range. You can also find out if there are discounts on offer – for example, for bulk-buying or early payment – or opportunities to negotiate. Before you start, ask your local council whether you need any permits. Fines for unlawful renovation can be hefty, as can the cost to repair or rebuild.
Mistake 2: Failing to plan properly
Poor planning can cause big problems. Your budget or schedule could blow out, the property might end up worse off, or you might not achieve what you really wanted to.
Planning should include these three elements:
- Scope: What you want to do and the resources you need.
- Schedule: When different aspects of the renovation should happen.
- Budget: How much you plan to spend.
If you’re having trouble, consider hiring professionals. This may be an architect to provide drawings, or a construction manager to juggle the different elements.
Mistake 3: Underestimating costs
First-timers often make the mistake of setting a budget – “we’ll spend $50,000” – without knowing what it will buy. Don’t fall into that trap. If you research building materials, you’ll be more likely to buy the right quantities at the right price. If you make detailed plans, your trade quotes will be more accurate. Good research and planning will help you create a realistic budget.
Remember to build some contingency into your budget in case things don’t go to plan. Adding 10 to 20 per cent to the final budget is a good rule of thumb.
We see it quite often, a client takes out a top up loan to assist funding their renovations only to see costs blow out and have to return for further funding. This can end up costing you even more, considering additional application fees and the time is takes to access more cash through your equity.
Mistake 4: Hiring the wrong people
Labour is one area where you’ll want to cut costs, but quality should trump price. It’s no secret that reliable trades are hard to secure presently, but you should still tread carefully, as it could cost you more time and money by rushing into an agreement to start quickly.
- Hire for the job: It’s tempting to hire a jack-of-all-trades, but try to hire specialists for important jobs. For example, hire a plumber, not a handyperson, to install a sink.
- Make sure the tradesperson is licensed: The tradie is accountable for his/her work, plus the renovation comes with a warranty.
- Check references: Word-of-mouth recommendations are often the best reference. Also look for genuine testimonials and signs of quality work, such as industry awards or positive media coverage. Your house has a better chance of becoming your dream home when you avoid the most common renovation pitfalls.
When it comes to financing your renovation our friendly and experienced Mortgage Brokers can help – call us on 8300 8300.
This information is general in nature and does not take into account your personal circumstances.