Whether you’ve just purchased a property and you’re planning on completely rebuilding, or you’re thinking about starting an existing renovation project on the home you already live in – it’s vital that you get your budgets sorted before starting any major renovation project.
Renovation projects often become ‘your baby’, as it’s always a super satisfying feeling to put energy into something and then see it progress from conception to completion. However, it’s very important that you get your finances straight and make a clear, concise home renovation plan before you begin, and in particular that you do not begin renovations at the expense of your general home maintenance budget.
Not only will this forecast how much you’ll be spending so that you can keep track as you go along, but it will also give you an idea of whether or not you can afford to start renovating in the first place!
For first timers, you should try to stick to not spending more than 5% of your home’s purchase price on renovations. If you plan your renovation properly and complete it to a high standard, it could add up to 10% to the property value of your home, making it well worth the effort.
Before you begin, sit down and make a list of everything that you would like to improve or add to your home. Then, divide this list into the aspects that are ‘must-dos’ and then other elements that would be nice additions. This will help you to keep everything in perspective as you prioritise the different aspects of your home renovation, as you’ll be able to start with the things that have to be done, and then use any remaining budget to add the finishing touches.
Common areas that are major priorities when it comes to home renovations are high-traffic areas like kitchens and bathrooms, as well as communal areas like decks and patios. For example, you might prioritise redoing the appliances in your kitchen and updating the tiling in your bathroom.
When this is completed (and if you have the funds), you can then focus on installing a pool or building a granite kitchen island.
If you’re working with a contractor or quantity surveyor, they’ll be able to give you a more accurate financial representation of your project if you already know:
Have a look at home improvement or design magazines to make sure you have a clear visual image of what you’d like your home renovation project to look like when it’s complete.
When you have a clear representation of what the different elements of your home renovation project will look like, it’s time to start gathering and comparing quotes. You’ll be surprised how much quotes from different tradespeople will differ, so it’s important to compare them to make sure you’re getting a good deal.
Of course, the price will depend on the experience and reputation of the company you’re working with and the materials you’re using. With this in mind, be sure to research the company’s online reviews, or seek word of mouth referrals from people who have previously worked with them.
Another good way to break down a home renovation budget (if it’s more appropriate for your specific project) is to divide the elements into ‘structural’ or ‘cosmetic’. Cosmetic renovations are easier to estimate, and include things like painting walls, replacing flooring, updating fittings and changing elements in kitchens and bathrooms. Structural elements, on the other hand, can be tricky and will probably need professional guidance and a detailed inspection in order to estimate. These include things like extending living areas or adding dividing walls.
Kitchen: $12,000 to $25,000 (ranging from a basic structural upgrade to cosmetic upgrades like painting and Caesarstone benchtops)
Bathroom: The average renovating homeowner spent an average of $16,440 on renovations of a large bathroom (more than five square metres) in 2015. However, you could do basic cosmetic upgrades like replacing a vanity, redoing tile paint and replacing a shower screen for $5,000 to $6,000.
Landscaping: The cost of this home renovation element varies greatly depending on the type and size of backyard you have. If you have a tiny little terrace or small garden, you could give it a makeover for less than $1,000. However, if you’ve got a large garden in a brand new house, it could be up to $50,000. In both cases, you should allow $5,000 to $6,000 for quality landscaping efforts.
It’s so easy for home renovation projects to get out of hand, which is why it’s really important you make efforts to ensure you’re sticking to your budget. You don’t want to overcapitalise and then find yourself in a very tricky financial situation when it’s all over.
Fortunately, there are a few things you can do to make your budget stick (and stretch).
Nimble offers quick online loans for if you need a stress-free way to borrow money. Whether it’s for starting a new home renovation or for fixing a leaky tap, we’ve got you covered. Apply now to see whether you’re eligible.
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