With reality TV shows like The Block and House Rules making house restoration and renovation trendier than ever, it can be tempting to want to get your own bit of home improvement action.
If you’re feeling inspired by the big winners on renovation shows and considering taking a punt on a renovator’s delight of your own, you need to carefully weigh up the benefits and risks before grabbing the work boots and sledgehammer.
Here are some pros and cons to think about to safeguard your renovation against the potential for it to turn into a money guzzling reno nightmare.
What should I consider before buying a renovator's delight?
- Affordability. Buying the worst house in the best street gives you a cheaper point of entry into the housing market of desirable, growing and expensive suburbs. This will also give you a better chance of getting a good return if you sell it after the renovation or in years to come.
- Opportunity to make a decent profit. If you’re planning on “flipping” the property to make some money, you need to get educated on the areas you’re interested in. Speak with several local agents to get an idea of how much newly renovated properties are selling for, whether they are in demand, what kinds of improvements would add the most value and what types of potential buyers are typically on the market.
- It’s fun. If you’re an aspiring interior designer renovating gives you the opportunity to start fresh with a blank canvas and redesign and decorate the home to suit you and more importantly your target buyers’ lifestyle, requirements and tastes, rather than making do with someone else’s choices.
- Renovating can get very expensive if you aren’t careful and diligent in your spending. It is easy to blow the budget when tackling a renovation project, especially if hidden construction problems or unforeseen planning hurdles arise. When setting your budget make sure you have some emergency funds set aside for any minor or major hiccups. It is wise to enlist the help of an experienced builder and architect to inspect the property and give you a ballpark figure for the cost of the labour and materials that would be required to fully renovate the home.
- Risk of overcapitalising. You don’t want to get carried away and spend too much on the renovation only to discover you would have been better off buying something newly renovated in the first place. Research what is going on in the area and make sure your renovation plans and spend are in line with the market. You’ll be unable to sell a newly renovated home with all the mod cons for $900,000 if it’s situated in a moderately priced neighbourhood where the median house price is $450,000.
- Problem properties are those that are often heavily discounted and have been sitting on the market for a while that turn out to be a property lemon. Remember if something sounds to good to be true it probably is. Every time you buy a property, especially if it seems to be a bargain price, it is important to have an independent building inspector survey the home and land to see if there are any major defects or site issues. Problems with pests, mould, fall, the electrical system, plumbing, foundations and roof are the most difficult and expensive to fix and can turn the simplest of renovations into a tedious and costly exercise.
- High involvement. Reputable tradespeople can be hard to come by these days, so a lot of investors tend to end up managing their site and having to monitor the progress of the renovation to make sure the project stays on track and on budget. Having good communication with your builder and tradespeople is vital for the renovation to run successfully and smoothly.
In April 2015, News.com.au reported that a father son duo, Tom and James Toth, pocketed a tidy six-figure profit having spared no expense on a $500,000 renovation. The formerly derelict Victorian cottage at 45 Foote Street, Albert Park, VIC sold for $1.82 million in March 2015, that’s double what it was bought for pre-renovation in 2012.
Mr Toth said that the project was calculated to make a profit and the planning involved researching house sale prices in the area and seeking advice from local agents regularly. This shows that when gone about in the right way, renovator’s delights can have the potential for big payoffs.
So remember, the secret to successfully fixing up a renovator's delight lies in thorough research, meticulous planning, strict budgeting and finding the right builder and trades for the job.
Happy house hunting!
From the Homely team
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