It might sound obvious, but many forget that good renovations make you money, bad renovations can cost you money.
Renovations might seem fun and profitable when you’re watching The Block, but they can prove stressful and costly if you don’t nail the basics.
We’ve all heard of nightmare renovations that drag on forever, suck up astonishing amounts of money and don’t produce a return on investment.
Good renovations, by contrast, tick these three boxes:
● They come in on time
● They come in on budget
● They deliver a net profit (the renovations cost less than the value they add to the property)
Sound easy to achieve? Well, there are many pitfalls that can turn a dream renovation into a nightmare.
Renovations are hard to do
The first category of pitfalls applies to DIY renovators.
When you do the renovations yourself, it’s easy to overestimate your skills and the time you’re prepared to commit to the project, especially if you’ve gained a false impression of the process from watching The Block and similar shows.
Unsurprisingly, amateurs often struggle to do professional-quality renovations. When that happens, it’s easy to become frustrated with your work and fall behind schedule – and respond by cutting corners. This then leads to a further deterioration in quality.
The result is a renovation that costs you money rather than makes you money.
Trusted professionals are hard to find
The second category of pitfalls applies to home owners who outsource their renovations.
At first glance, it seems these owners can’t lose with outsourcing, because they’re recognising that they don’t have the skill and/or time to do the work themselves.
However, this is the point when many owners discover an unexpected problem – they don’t have the skill and/or time to source trustworthy professionals.
It can be hard to find builders, architects, interior designers and project managers who will charge a fair price and do a good job. Choose wisely and your renovation may make you money; choose poorly and your renovation will probably cost you money.
Make sure you do your research on any tradesperson. Reviews are easy to find these days and sites like Hipages can help you with the search.
A good renovation requires a good plan
There’s a third and final category of pitfalls to watch out for.
Unfortunately, problems can still occur even if you’re a DIY renovator who knows what they’re doing or you’re a home owner who sources the right professionals.
Here are seven common problems:
Not budgeting enough time
Even the most skilful renovators can fall behind schedule if the weather turns bad, materials arrive late or structural faults get discovered during the course of the work. Your plan needs to be flexible enough to accommodate delays.
Not budgeting enough money
Renovations involve so many moving parts that it’s hard to know in advance just how much an entire project will cost. When you’re organising your finance, you need to have enough money in reserve to cover blowouts.
Not organising your finance in advance
Yes, you need to organise your finance before you start, because when bills fall due, you need to be certain you can pay. If you’re taking out a construction loan, it might take several weeks for the lender to approve the loan. Or the lender might decline the loan, forcing you to look for an alternative source of funding.
Not getting council and strata approval
Councils and strata managers are not known for their flexibility and sense of humour. Don’t assume they won’t discover your secret renovations – because they probably will. Don’t assume they won’t punish you – because they probably will.
Doing renovations that don’t suit your home or your suburb
Your project can fail even if it comes in on time and on budget. How? If the renovations make your home less visually appealing, your home’s resale value will fall.
Doing renovations that add less value than you spend
Another reason why an on-time, on-budget renovation might fail is if you spend money on the wrong things. Don’t expect buyers to give you credit for capital improvements they can’t see or for state-of-the-art upgrades that look like cheaper alternatives.
Making too many changes along the way
Changes of plan generally cost time and/or money. So the more changes you make, the less likely you are to finish with a renovation that comes in on time, comes in on budget and delivers a profit.