Need to cut the cost of renovating a house? A home renovation is likely to become one of the most expensive home projects you’ll ever undertake, with many people running over their original budget. There are ways, however, to avoid overspending unnecessarily, with careful planning and know-how.
Whether you are renovating a house completely, adding an extension or updating your home’s exterior, it’s essential to remain realistic while budgeting. Please read our guide to cutting your renovation project’s cost for advice on everything from hiring an architect to choosing new fixtures and fittings for your new kitchen or bathroom.
The scale of the works determines renovating costs. Are you pretty much rebuilding your entire home, or are you just putting in a new kitchen? Even so, no two renovations are the same, and there can always be unforeseen hiccups that come at a cost.
If you’re on a tight budget, these cost-cutting tips will help you stay one step ahead and still ensure a good return on your investment. Planning for a new look for your house? Look no further! MJS Construction Group is here to help in your home builders.
House Renovation Cost
According to the Australian Bureau of Statistics (ABS), the average Australian spends around $25,000 on house renovations, according to the Australian Bureau of Statistics (ABS), while the average home renovation costs between $600 to $2,700 per square metre. If you’re on a shoestring budget or want to save money, these cost-cutting tips could help you save money on the costs of your home renovation.
How Much Does It Cost To Renovate A Kitchen?
The average cost of a kitchen renovation in Australia is $24,000, according to the Housing Industry of Australia’s Kitchens and Bathrooms Report 2019/20.
How Much Does It Cost To Renovate A Bathroom?
The average cost of a bathroom renovation in Australia is $19,000, according to the Housing Industry of Australia’s Kitchens and Bathrooms Report 2019/20.
How Much Does A Renovation Add To Home Value?
As a general rule, it’s best not to spend more than 5% of the home’s value on renovations to avoid overcapitalising.
Renovations generally add up to 10% to the value of your home. So for a house worth $500,000, a good renovation could add an extra $50,000 to the value of your home. Kitchens and bathroom renovations generally add the most value to your home, as these are the rooms that sell houses.
Is It Cheaper To Remodel Or Build A New House?
The cost per square metre of a new build is generally cheaper than the price per square metre of a renovation. This is because renovation costs can be harder to predict, mainly if there’s asbestos, electrical rewiring, pests or major structural work that needs to be done. The prices of upgrading an older home can be significant.
According to BMT Tax Depreciation Quantity Surveyors, the average cost to build a new standard three-bedroom home is $1,600 per square metre.
The average cost to renovate a standard three-bedroom house in Australia is between $2,000 to $2,500 per square metre, according to Renovation Junkies.
How To Plan Your Home Renovation?
The first thing to do is work out a plan for your renovation, including designs and sketches, a list of needs and wants, DIY jobs and jobs for the professionals, etc.
Then work out the budget. Don’t forget to build in a contingency for any unexpected costs that are likely to pop up. Remember, it’s considered best not to spend any more than 5% of the home’s value on the renovation to avoid overcapitalising.
Next, you’ll need to hire your team. Shop around and get several quotes from contractors and builders, and make sure they have a contracting license, liability insurance and good reviews from previous clients.
Then you’ll need to sit down with your contractor and work out how long the project will take. Be sure to allow time for materials to be shipped and factor in demolition time and public holidays.
Finally, it’s time to prepare the space for renovation. Pack up your belongings and move them somewhere else, so you have a blank canvas ready for demolition.
Ways to Save Money on a Home Renovation
Set a Budget and Stick to It
One of the biggest mistakes homeowners make when renovating their property is failing to set a budget. By not having one in place before you begin work, you’ll often end up spending more than you originally intended. Be sure to figure out how much you can afford and create a budget for your renovation project.
This is perhaps the most critical aspect of your planning and should be detailed in a spreadsheet. This is especially critical if you are undertaking a large job with multiple contractors, materials and timelines. The first step is to work out what you have to spend and funding the project. You can set about getting quotes for the materials and labour.
If you are undertaking pre-sale renovations, look to limit any structural works, as labour intensive tasks like demolition and building are expensive. There are also creative ways of sourcing materials that can help you save, which we will look at later in this article. You also need to factor in building permits and council permissions.
When you are done, add a 10 to 15 per cent buffer for any unforeseen costs that pop up, which could derail your best efforts to keep that budget in check.
Develop a renovation timeline
The more complex your project, the more reason to have a timeline. This is an overview of what will happen when and who is going to do the work. Each contractor needs to be scheduled, so they are on-site at the right stage of the project.
This is critical for a job like a bathroom or a kitchen reno, where multiple trades are involved. Remember, time = money so that any delays will eat into your precious budget. At MJS Construction Group, we have the best dual occupancy selection to make your house a dream come true.
Make Every Effort to Save on Material Costs
Another area where homeowners get in trouble is that they spend way too much on material costs. For example, you can buy recycled or reused building materials, which will help cut down on your expenses. Even better, some of these reused materials are in excellent condition, so you’ll get a good bargain on more high-end items.
You can also check Craigslist, eBay or Freecycle to find free or cheap materials online. Many people are often literally giving this stuff away on these sites, so take advantage while you can.
Find Good Deals on Essential Pieces
No one said you had to pay top dollar for the essential pieces for your home renovation. Instead of spending a small fortune on new granite countertops, you can wait a little while for the materials to go on sale. The same holds with kitchen island installations, brand-new windows and just about anything else that needs replacing during the home renovation process.
Pay Cash for Materials and Contractor Expenses
This tried-and-true idea works wonders when attempting to cut down on renovation expenses. You’ll be able to save a significant amount by offering to pay cash for your materials and contractor fees for a couple of reasons. First, by spending money instead of using credit, you can avoid the possibility of paying hefty interest charges. Second, sometimes contractors will give their customers a price break when you offer to pay cash for their services.
Don’t Rush the Renovation Process.
Sometimes people are eager to finish their home renovations. This can turn out to be a significant mistake if you aren’t patient. Instead of using your credit to pay for your expenses, wait and save up. Additionally, you might end up spending top dollar for materials or contractor fees when you could’ve paid much less if you were willing to wait a bit longer.
Perform DIY Renovations When You Possess the Skills to Get the Job Done
Some repairs and renovations are going to be out of your league. However, many folks will have no problem handling some DIY projects on their own. Instead of paying somebody to complete easy to moderate repairs or demolition, you can take the bull by the horns and perform these activities yourself.
This is one of the most effective ways to save money during a home renovation. If you’re thinking, “I’m not handy, so this tip’s not for me,” well, think again! You may not be able to put up drywall or even feel comfortable laying tile, but there are some things you can do to prep your space before a crew comes because remember you’re paying a crew per hour, regardless of how skilled or unskilled the task. If you can demo the area, clean up, prepare surfaces (like scraping off mastic on the floor and skim-coating walls), and paint, then you’re one step ahead.
If you have moderate DIY skills and want to take it up a notch—now’s the time! YouTube is your friend. As long as you can learn a new skill and take your time to do it right, your determination is your biggest asset. If you don’t have the tools required, renting them from a local hardware store will save you quite a bit of money versus hiring someone to do the work for you. Plus, rental tool due-dates are great motivators to finish a job!
If you’re planning to do a lot of work yourself, be aware that there are things you should not do yourself if you aren’t licensed, such as electrical work or moving utility lines. If you are skilled enough for a job like tearing down walls and installing load-bearing beams, be sure to get a permit. This will keep you from getting into trouble, and it will also protect future inhabitants of your home.
Reuse Materials Whenever Possible
Instead of letting certain materials go to waste, feel free to reuse them whenever you can get away with them. This is a great way to save money without going over your budget or breaking the bank. For example, you may be able to reuse some of your cabinetry and appliances without replacing them.
The most significant way I saved money in my kitchen renovations was by reusing cabinetry and some appliances. If you need more than paint and new hardware to be happy with your kitchen cabinet doors, then be aware that you can still save a lot of money by refacing doors to change the style or even replacing the doors but leaving the cabinet body in place.
Even if you can’t reuse anything preexisting in your space, you can buy material and fixtures from salvage yards, Habitat for Humanity ReStores, and even building material auctions. Don’t forget about buy/sell/trade websites too! Sometimes people are moving and need to sell excellent appliances quickly, or you may end up finding a load of lumber leftover from someone else’s project.
The hunt for salvage materials can be a lot of fun and add so much character to your project. Plus, you’re helping the planet in the process of saving money!
Avoid Making Big Purchases Until the Items Go on Sale
If you’re renovating your kitchen and putting in brand-new appliances, you should always wait for them to go on sale. Of course, this only works if you aren’t under any time constraints, but instead of buying an appliance on a typical Wednesday, you could wait until a big Fourth of July sale is happening. You’ll save a lot of money this way, so take advantage of these excellent opportunities.
There are times of the year that are better for purchasing certain big-ticket items, such as holidays for appliances, Black Friday for electronics and power tools, and the end of summer for outdoor furniture and lawn care items. Research the best time to make your purchase, and don’t let your impatience steer you away from getting a good deal. And don’t forget about buying scratch-and-dent appliances or floor models!
Shop Around When Hiring Help for Home Renovations
You want your home renovations to look amazing; however, that doesn’t mean you have to pay top dollar for the most expensive contractors in your area. You can shop around and get multiple bids from as many contractors as you see fit. This will help you find a top-notch and inexpensive contractor that meets your needs.
Sell Any Working Appliances That You Intend to Replace
Do you own a refrigerator that’s in good working order? How about a well-used stove that’s still in good condition? Instead of throwing these valuable items away when you replace them, you could list them on Craigslist, eBay or Facebook Marketplace. You never know what someone may want to purchase. Selling your old but working appliances could help you recoup some of your renovation expenses and lower your costs simultaneously.
Tips For Hiring The Right Tradies
Hiring the right trades and contractors for your renovation is another factor that could make or break your budget. The key is to hire based on reputation and not to be solely focused on price. There is a wide variance in what businesses charge, and rates do not necessarily match workmanship.
Don’t be shy to ask for licences, references, or to see previous jobs they have worked on. And always get a quote in writing, including a detailed breakdown of costs. Also, ask friends, family, colleagues and neighbours for recommendations – word of mouth is a powerful tool for weeding out shonky operators.
Borrowing Money For Renovations
Unless you’ve got cash stashed away to fund your home renovation, you’ll have to explore other options to finance your project. We’ve rounded up a few different ways to support your renovation project – depending on your situation and the extent of the renovation you’re planning.
Unsecured personal loan
An unsecured personal loan is essentially a loan that can be used to finance whatever you like – be it a holiday, a car, or home improvements. Unsecured personal loans generally come with higher interest rates and fees than other loans because there’s no guarantee (security) on these loans, and they’re riskier for the lender.
Secured personal loan
A secured personal loan allows you to borrow money by putting up an asset as security for the loan. If, for example, you’re doing a home renovation, you can put up your home as security for the loan. If you have a mortgage, you can use the equity in your home as a guarantee (the amount of equity has to be more than the loan amount).
If you’ve already got a mortgage, you could up your mortgage amount to finance your home renovation. If your mortgage has a redraw facility and you’ve made extra repayments, you may also want to consider using that to fund your renovations.
If you don’t have enough equity in your home, you may want to consider a construction loan. A construction loan is typically based on the estimated final cost (post-renovation) value of your property, which allows you to withdraw whatever amount you need in order to pay the latest renovation-related invoice that has come in. Keep in mind that construction loans are typically used for major renovations (such as adding new rooms or making significant structural changes to the property) – not for minor cosmetic changes. Finding the right Melbourne home builders is an important decision. Check out our range of the best home design constructions at MJS Construction Group.
It’s possible to save money on your upcoming renovation. You have to be willing to do things a little bit differently than most people. Take advantage of sales when the opportunities arise, hire good but inexpensive contractors to help with the renovations and use the rest of these tips to the best of your ability in your pursuit of saving money!