Renovating a home is a great way to increase both its value and your rental yield, if you’re an investor.
With rising prices impacting all aspects of our lives, it’s more important than ever to make sure your renovation comes in under budget. Fortunately, there are a number of things you can do to help slash the costs of your project.
MANAGE THE PROJECT YOURSELF
One of the quickest ways to reduce the costs of a home renovation is to take over a large portion of the project management. If you hire a construction company that specialises in renovations, you will ultimately be paying a project manager to handle all of the required work. This typically includes sourcing, organising and scheduling all of the relevant trades.
If the scope of your project is such that you can handle this part of it, then you could save yourself a considerable amount of
money. Some people might even have the skills to take on certain tasks themselves. If you are able to do parts of the project
yourself, that can save you even more money. However, doing everything yourself might actually end up costing
more money, when you account for your own time.
The total cost of a renovation will always depend on how large the scope of work is. If you’re adding a second storey to a house, then it is likely to cost you a lot of money. When assessing a renovation project, it’s important that you only work to what the market wants. There’s no point turning your simple outer suburbs investment property into a luxury home if the market in that area can’t support it.
Stick to doing the basic elements that will give you the most bang for your buck. More often than not, you can replace the flooring, paint the walls and add new window coverings to make a huge change to your property. If you have a slightly larger budget, then focus on other areas such as replacing the kitchen cabinets. More often than not the bathroom is the most expensive part of the project – unless you’re making structural changes to the property.
CHOOSE LESS COSTLY MATERIALS
In the past few years, the cost of building materials has been rising and it is now integral to shop around for the best price. But it’s also important to know where you need to spend money and where you don't. Some materials, such as tiles, can see a big difference in price and quality. The interesting part is that it is often the labour component of doing the tiling that actually costs the most money.
If you’re going to spend money, it won’t cost that much more to have high-quality tiles in the context of the overall project.
There are also other ways to source cheaper materials, such as using second-hand cabinets. Quite often people will give away or sell old
cabinets cheaply when they update their kitchens and it’s possible to use them again.
DON'T MOVE THINGS
If you’re really wanting to stretch your budget further, one way to save money is during the design stage.
One of the major costs of a renovation project comes from moving electrical and plumbing to different areas of the property. For
example, if you want to move the location of your shower, you will have to put in a new drain and all the associated pipes will need to
be altered as well. This is normally done by literally cutting into walls and floors.
If you keep these key services in their same locations, it makes for a quick and cheap changeover. Similarly, if you want to start knocking out walls and making structural changes, the costs of your project can quickly add up. While it might be worth it to add appeal to the property, if you need to save money upfront this is something you could avoid doing.
Our in-house Mortgage Broker can help you work out the best loan to finance your renovation.
Get in touch to start a conversation.