If your home is your biggest investment, it makes sense that you should think like an investor when you’re planning renovations to your property. Avoid trendy design features that could turn buyers away, even if you’re intending to live in your property for the long haul. Check out my tips to avoid overcapitalising as I chat with Savings.com.au‘s Harrison Astbury below.
Property expert says to avoid ‘quirky’ renovations
By Harrison Astbury, Savings.com.au, April 14, 2021
As residential building activity hastens, one housing affordability expert has warned against home renovators following trendy reality TV style cues.
Ian Ugarte, author of ‘Small Is The New Big’, said the trick is to use styles and finishes that appeal to a broad home-buying base, assuming home buyers are renovating to sell, rather than live in.
“While the glut of reality programs has seen a steady increase in renovating generally, deferring to trending styles that are at best ‘quirky’ and at worst just plain ugly, is likely to not only inflate the cost of the renovation, but also significantly limit buyer interest in the property,” he said.
“The last thing you want to do is limit or restrict your buyer base by introducing features like curved walls and floating beds that might have personal appeal, but are likely to alienate a chunk of possible buyers and potentially blow out your renovation budget in the process.”
The fresh warnings come as the Australian Bureau of Statistics’ (ABS) building activity data shows an uptick in residential builds, but to a lesser average value in the December 2020 quarter.
Private sector house commencements over the December 2020 quarter rose 26.6% compared to the September 2020 quarter, for a total of 33,761 private sector houses commencing.
This is a rise of more than a third compared to 2019’s December quarter.
However, residential build value was $15.4 billion, only 2.6% up on the September quarter, and 1.7% down in value compared to the December 2019 quarter.
Alterations amounted to just over $2.5 billion, up 3.1% on the quarter, and up 9.8% on the year.
Mr Ugarte outlined some time-proof tips to heighten chances of a good return on renovation investment, including: studying the sold prices in the area, research planned and existing infrastructure in the area, creating a budget and sticking to it, and being realistic on how much growth is possible.
“Keep in mind that if you are planning on renovating, you’re going to want to make a minimum of 20 to 25% uplift on your manufactured growth strategy,” Mr Ugarte said.
“Like any form of investment, a renovation should be about making a profit – not just breaking even, or worse, losing money – and by carrying out this requisite research you’re best placed to ensure you’re not left short-changed once it’s done,” he said.
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