Large scale renovation has become a way of life for many property investors, however this should not deter first home buyers and people on a tight budget who also want to improve on their investment. As well as keeping on top of the general costs of home ownership, there are plenty of small things that can be done at low cost that, if done properly, improve not only the appearance, but also the value of your investment property or first home.
Where do I start?
The first step is to work out what you are unhappy with and what changes you can make that will actually make a difference to the value of your property. If you haven’t recently had a property appraisal, this can be a good way to get an outsider’s (and a professional’s) perspective on what needs to be done and where your money would best be spent. An agent can advise you on things that should most urgently be addressed and things that are not worth investing in. Then you can start to make a ‘To Do’ list based on their advice, but also fleshed out with the improvements you would like to make.
To manage your budget, it might be useful to split the list into upgrades and renovations. Upgrades could include things like repainting, new lighting, window dressings, floor coverings, door handles, taps, new plants etc. Basically, things that are more cosmetic than structural. Renovations are generally larger scale but might also include replacing kitchen benches, retiling bathrooms, adding customised storage solutions, along with perhaps knocking out a dividing wall, adding a new room or rebuilding half the house.
Once you have all the ‘things’ listed, you can then break that list down further into costs and time frames. Think about the things you can do for under $500, or under $2,000 and then what requires a larger investment – maybe $5,000 or more. You can then plan what jobs you can do in the near future and which ones might need to be postponed until you have a little more cash available.
How much can you afford to do now?
Obviously, renovations need planning and a greater investment than some simpler upgrades. But dividing up your priorities in this way means you can start on your list today. Sometimes it is just a matter of biting the bullet and jumping in. There may never be a time when you can afford to do everything you want to do, but starting small will get the ball rolling and the results can then inspire you to keep going. Upgrading small elements of a room can make a big difference to how it looks and feels – all in the course of an afternoon.
You might spend $20 at Kmart or Target on a pot plant or a picture frame, or $500 at Ikea or Bunnings on storage solutions, paint, taps, door and cupboard handles, or curtains – the key is to just get started with whatever you can afford today. While those small and motivating things are happening, you could start on some DIY renovations, or talk to tradespeople and get quotes and time frames for bigger jobs. Sometimes the small shopping will give you ideas for the bigger projects too – you wouldn’t be the first person to go to Ikea to buy a rug and come home with a custom flat packed kitchen.
Kitchens, bathrooms and laundries
Taking a room by room approach is a useful way to tackle your improvements from a practical and a financial perspective. However, there can also be some benefit to grouping similar jobs in together to maximise your opportunities. If you are upgrading then you might buy new handles, taps, or tiles for all of your wet areas at the one place to get a bulk order discount. If you are renovating the same applies - getting one plumber in to look at all your plumbing needs in one call out, is much more economical than getting them out multiple times and paying two or three call out fees.
In your wet areas, you should consider whether things can just be upgraded rather than totally replaced. New bench tops and tiles, extra storage, new fittings and fixtures and a fresh paint job could be all that’s needed and ends up much cheaper than knocking things down and rebuilding a whole new room from scratch. Your appraisal will be useful here – an agent can spot a death row kitchen or bathroom a mile away and a contemporary top of the range oven in a shabby 1960s kitchen does nobody any favours. If it looks like you are replacing or upgrading everything in the room then a full renovation may be a more efficient and cost-effective approach than the band aid that some upgrades can end up being.
Bedrooms, studies and living spaces
Though these are often simple rooms, there is a lot that can be done to improve them or in fact convert one in to the other. Start with floor, wall and window coverings – pull up old carpet and polish floorboards or concrete, freshen up paint or add a feature wall, buy new blinds or curtains. Upgrade light fittings and storage solutions and consider whether the spaces you have are being used in the best way possible. A 4-bedroom house with a study and a home cinema in 2 of the rooms may be much more attractive to the market than a home with ‘too many’ bedrooms.
Renovations can be game changers in these rooms too – knocking out a wall between two small bedrooms to make one master suite or second living space, brings more light and space into the home. Removing dividing walls between kitchen, dining and living rooms will offer an essential conversion of an older property into a more modern open plan version of itself. Adding extra windows, doors or skylights can also transform a space and make it much more functional and meaningful.
Don’t miss your bonus round
There are various grants, incentives and bonuses available to Australian homeowners, related to making improvements to properties. These vary from state to state, so it’s worth checking your local government website to see what you might be eligible for. In the Northern Territory for example, there are homeowner incentives for first home buyers (up to $2,000 towards household goods) and stamp duty rebates for your principal residence (up to $7,000 off stamp duty) that can be put away for future renovations and upgrades. It’s useful to check what energy rebates you may be eligible for too to reduce your costs on heating, cooling, lighting, water and electricity solutions.
Thinking of selling
The following advice is of a general nature only and intended as a broad guide. The advice should not be regarded as legal, financial or real estate advice. You should make your own inquiries and obtain independent professional advice tailored to your specific circumstances before making any legal, financial or real estate decisions.