You have probably spent a lot of time deciding your needs and wants, colour schemes, vision boards and trailing around shops looking at kitchens and bathrooms, flooring and on it goes however, all that time can be wasted if your desires do not meet your budget.
For any renovation to be a success story an estimate of the basic works required have to match your budget from day one. The simplest way to get educated on this is to get a professional Building Designer to go through your wish list and your budget so that you are aware from the start how you need to prioritise your needs and wants. If planning an extension A Building Designer can also check if you are in an area where the local planning scheme will permit an extension on your block and the size limitations (if any).
We have found that by dividing your goals into manageable segments within the budget is a real game changer for most renovators learning to use their budget wisely.
For example, for a 2 bedroom, 1 bathroom, kitchen and laundry renovation under an existing roof, a good ball park figure is using 25% of your budget for a bathroom and a further 25% for the kitchen. Up to 15% for each bedroom, 10% for other smaller areas such as a laundry and probably the most important is a 10% for a contingency fund.
If you are extending the same principles apply plus the cost of the new structure. It is therefore important when speaking to a builder to get them to estimate the cost of each area. This way the budget can be reduced perhaps in one area to achieve something that is a “MUST HAVE” in another.
The issue of over capitalising is a very important part of any renovation plan. Getting a real estate agent to come and value your property as is and then working on the cost of your renovation compared to what the new-market value would be, is a very interesting and extremely valuable exercise to undertake.
For example: if you have decided to budget $60,000 for a renovation and the property is currently valued at $350,000 but the best comparable property in your area after renovation is still around $400,000 then you would need to consider whether your budget can be justified.You may plan to be in the property for another 10 years and feel the cost is justified but in 10 years you will be looking to do this all over again.
Usually just repainting to a high standard can give you a return on outlay of up to $200%. Bathroom and kitchen remodelling can bring a return of anything from 50-100%.Changingold doors and windows again gives 50%+ return on your investment and adding good outdoor living space can return you anything from 60-90%. The 2 areas that we have realised over the years that do not necessarily gain a good return on investment is a pool and dedicated home office space as compared to remodelling a kitchen or bathroom.
THE MANTRA WE USE WITH OUR CLIENTS IS:
BUDGET v INCREASE IN HOUSE VALUE SHOULD BE THE PRIORITY.
Otherwise what’s the point??
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Author Simon Scott, Principal Designer and Owner of SSB Design Studio