The key to successful home renovation with a family, and on a budget, is planning all aspects of your project before you start. This means defining your goals, budget, finance and timeframe for completion, as well as assigning tasks to specific people.
Defining Your Goals
Any renovation project can be stressful, but when you involve children your patience can be tested. So rather than getting worked-up, break your project into smaller goals. For instance, let’s say you want to fully renovate your whole home. By breaking this down into rooms, such as the main bathroom, kitchen, and master bedroom, and then into individual projects within each room, such as tiling, painting, and installing new fixtures and fittings, you’ll be able to complete your home in stages and this will be less stressful and easier to finance.
In order to plan your renovation, grab a pen and paper and draw up a table with four columns or create a spreadsheet on your computer. Name column one GOALS. Then list which rooms in your home you’d like to renovate. Leave a sizeable gap between each room. Under the name of each room write down exactly what you’d like to change in that area.
Set Yourself a Budget
Once you’ve planned and written down all of your goals for each area in your home, the next step is for you to determine a budget for these areas and for each stage of your renovation project. To do this, name column two on your table BUDGET. Then list all of the materials you’ll need for each area of your renovation. Next find out how much each of these will cost. Tally up the costs for each area, and then add 10 percent to this figure. The 10 percent will be your buffer so that you can cover any price increases or unexpected costs.
If you’re going to make major changes to your home, such as moving walls and building new ones, then consult a professional builder for advice. Make sure you find a builder that can work with you and your family and one that respects your household rules, as you’ll be working with each other for some time and you want your builder to fit in with your household and disrupt it as little as possible. If you’re using a builder, then get a quote from them and then factor this cost into the total cost for the area they are working on. Don’t forget to add 10 percent to their fee to cover additional expenses.
Establishing Your Finance
When it comes to financing a renovation project there are a few golden rules. These are as follows:
Don’t over capitalise – Before you start renovating ask two to three real estate agents to value your property. Let them know what your renovation plans are and ask them if they think this will add value to your property, and if so, by how much. Most real estate agents will be able to suggest where you can add the greatest value to your property. In most cases, modernising bathrooms and kitchens or adding bedrooms and living areas are some of the most profitable renovations made to homes.
Think eco-friendly – If you’re going to go to the effort of renovating, then think eco-friendly and install water and energy saving products, such as drip-feed irrigation and appliances with a higher energy rating.
Have realistic expectations – Be realistic about finance and only commit to renovation projects that are affordable. Don’t get finance approval for half a project or try to cut costs, otherwise you may find yourself left with a half finished project that will reduce the value of your home rather than add to it.
Know how you’ll pay for your projects – If you’re in-front with your home loan repayments and have a redraw facility, then this may be an excellent way to finance your renovation project. Just be mindful that if you use this option then the money used will increase the amount you owe on your home loan interest.
If you don’t have a redraw facility, then you can discuss your ideas with your lender. You can either take out a line of credit loan, which is similar to a credit card in that you pay interest only on the credit used, but this form of credit has much lower interest rates than a credit card. Alternatively, you can take out a personal or construction loan, depending on the type of renovation project you’re seeking to carry out. You may also opt to refinance your existing home loan and release some equity.
The best option will depend on your project type and on your personal and financial circumstances. Before you make any decisions ask your lender or mortgage broker about each loan option and the fees and charges associated with these, then calculate the costs of each so you can decide which is best for you.
Create a Timeframe for Completion
Name column three of your table TIMEFRAME. Then write down an estimated timeframe for completion for each stage of your renovation project. Then stick to these deadlines so your projects flow smoothly. Also don’t start a new part of your renovation project until you’ve finished the previous project, otherwise you’ll have too much on the go and you’ll find this becomes overwhelming.
Assign Tasks to Specific People
On your table name column four TASK MASTER. In this column write down the name of the person who will carry out each aspect of your renovation project, include tradespeople and builders, as well as your children so that they are involved in the renovation project right from the start.
Do you want to know more about renovation finance? If you said YES, then contact eChoice and find the right finance for YOU today.
Written by eChoice
Since 1998, eChoice has helped more than 50,000 Australians secure a home loan through its network of over 25 lenders and hundreds of loans. Best of all our service is cost and obligation free!