Are you considering remodelling your home? Maybe you should think otherwise. If you watch enough home shows and read famous house remodel blogs and sites, you might get the notion that remodelling your home is a given. Even your neighbours will show off their own home remodels and enthusiastically pass on their contractor’s name to you.
But home remodelling is not for everyone or every house. Before you pull up that corner of carpet or slap on a tester patch of paint in the living room, consider reasons why you may want to avoid—or at least delay—that home remodels that you have been dreaming about.
Many homeowners have decided that instead of going through the heartache, they’d rather stay in their home and make some renovations. But which remodelling projects are worth it? You don’t want to throw good money after bad. In this post, I’ll explain when you should consider renovation and tell you which home projects can pay off the most.
Aussies Love A Home Reno.
In 2019, we collectively spent over $36 billion on residential renovations, according to figures from the Housing Industry Association (HIA).
While a good renovation can add significant value to your home or investment property, there are times that the pain of a substantial renovation might not be worth the pay-off. So it’s essential to weigh up the potential value-add against the cost and hassle.
In recent years, there has been a growing trend toward renovating rather than upgrading or upsizing, with the high cost of property in Australia, and especially in Sydney’s eastern suburbs, causing many to stay put and improve their home instead.
When property prices are high, the potential changeover costs with stamp duty, moving costs and legal fees associated with buying and selling can mean making sense to stay put and renovate. On the other hand, when prices are flatter or falling, more sellers may take the opportunity to step up the property ladder. They may also try to close the gap further by renovating to add value before they sell. At MJS Construction Group, we offer a wide range of duplex build.
What’s The Value Of Renovating In Today’s Market?
How much value a significant renovation can add to your home depends on several individual factors, including your target audience, location, the scope of the development and how the work is done.
Great ways to add value with an eastern suburbs renovation include focusing on architecture, mainly if you live in Paddington and Woollahra. We’ve consistently found that the best renovations in the east of suburbs have a solid and clear architectural or design focus. They have a ‘wow’ factor that makes them highly desirable to your target market when it comes time to sell. Successful renovations also emphasise excellence and quality in all of the details, such as the fixtures and finishes.
Adding an extra bathroom to a terrace house is one example of a significant renovation that can pay off. The price difference between terrace listings with one versus two bathrooms can be as much as $100,000. That’s not to say it’s always down to the bathroom, though – the whole package has to be suitable to entice a buyer.
A new kitchen can be another way to get bang for your buck if your current kitchen is looking outdated. According to Domain, a kitchen update may cost as little as $10,000 but can add up to $50,000 to 60,000 value to your home.
Is Home Remodeling Worth It?
You May Not Break Even
You buy your house for $500,000, put in $50,000 worth of work, and sold it for $550,000 or more. Did you break even?
In a house sale, so many factors are at play that it is impossible to identify how each contributes to the selling price. Factors unrelated to remodelling may significantly impact a house’s worth, such as economic climate, comparables, mortgage rates, and more.
Some home remodels retain high value: major kitchen remodels, additions, bathroom fixes. Other remodels return little value upon sale. Investigate the resale value of home remodel projects and accept reality. Maybe that pirate-themed office you built for yourself is just that–for yourself, not for subsequent buyers.
Eco-Friendly Remodels Are Still Difficult
Recent advances mean that homes are more eco-friendly than ever. But the process of remodelling is inherently wasteful. Just look at the contents of your dumpster on your next kitchen remodel, and you will see 40 cubic yards of drywall, wood, carpeting, vinyl flooring, wire, and glass—all destined for the landfill. Not only that, consider the energy wasted in manufacturing and transporting the building materials.
However, you can make your next remodelling project as green as possible. If you’re not sure how to go about this, LEED consultants exist for this very reason. Be sure to always purchase EnergyStar-rated appliances for the kitchen and laundry room.
Home Remodels Can Fray Relationships
Home remodelling can have a corrosive effect on marriages and another close, personal relationships. Reclaim your life by maintaining a good balance of remodelling and living a rich, full life with your people, whether this means your spouse, children, parents, friends, or whomever. Investigate all the ways to keep your relationships healthy. Budget a long-term hotel stay for any remodelling project that takes a significant room out of commission.
Costs Always Seem to Rise, Not Fall
Find a contractor who can deliver a bathroom remodel on time and budget, and he’ll have guaranteed business for the rest of his life. More realistically, large-scale remodelling projects are riddled with change orders that increase the cost and extend the finish date. Even small remodels have a unique way of inching upward in price.
Get an accurate, third-party view of remodelling costs. After that, mentally add 25-per cent to both the cost and the schedule.
Some Home Projects Are Difficult to DIY
The clarion call of home remodelling shows and blogs is that you can do it all by yourself. Energetic home bloggers will install their air conditioners or furnaces, build additions, install metal roofing, jack up the house, add house siding or any number of other complicated home projects.
Some projects are tidy and well-defined: interior painting, installing floating floors, replacing electrical outlets, or building small items like benches or coat racks.
But things get costly when you begin a project by yourself, find yourself out of your element, and then shift the project to a contractor. To avoid that problem, categorise projects as do-it-yourself, hire-a-pro, or either way. Match projects against easily discernable home improvement skills that you already possess—not home improvement skills you hope to possess.
You Might Get Scammed, so Be Careful
If you go through life worrying about getting ripped off, you’ll never go anywhere. But a healthy dose of caution is always in order when approaching a giant home project that may run into the five or even six figures.
Yet home improvement scammers exist, and they are out there, on the prowl for their next victim. The lure of a big payday is exactly why unscrupulous contractors prey on unsuspecting homeowners.
Scam artists especially like to target exterior projects, such as those involving driveways and roofs. Others operate in a grey area. Water pipe insurance, while a legitimate business, might be entirely unnecessary for your home. Mould remediation, too, is a legitimate business, but many scammers insinuate themselves into this industry as a way to separate homeowners from their money.
Thoroughly research contractors to reduce the possibility of getting scammed. Make sure that you seek out the contractor, not vice-versa. If the contractor comes to the door unsolicited, a possible scam might be in the works.
If you believe this five-figure kitchen remodel is necessary, can you answer why? In most cases, an unattractive but functional kitchen can boil an egg and a pristine kitchen with seating for twelve at the breakfast bar.
Many homeowners add space to their house or recondition a bathroom for no discernible reason. Outside influences may fuel your decision to remodel: low home equity rates, boosterism from home remodelling shows, and neighbourly peer pressure. None are good reasons to remodel.
Carefully consider your next home remodelling project before committing yourself. Realise there is no shame in deciding not to proceed with the remodel at all.
When Is Home Renovation Worth It?
Let’s start with three situations when doing a home renovation can pay off either emotionally or financially:
Your home isn’t functional for your needs.
Does your home have a strange layout where you have to walk through a bedroom to get to the only bathroom? Or do you have a kitchen with appliances that barely work? When your home disrupts your ability to sleep, eat, or get to a bathroom, it warrants a renovation—if the cost fits your budget, of course. Making a few renovations can enhance how you feel about your home and make it a place you want to stay in for the long-term. MJS Construction Group has the best range of dual occupancy builder services to help you create your dream house.
You can save money.
Particular renovations can lower your expenses, such as new energy-efficient windows and doors—especially if your home is older and drafty. Building a garage might save money if you’re paying a hefty monthly fee for storage. Having an exercise room might save you the cost of a gym membership–you get the idea. If you plan to stay in your home, consider not only what a remodelling project will cost but also what it might save you over the long run.
Your home isn’t competitive in the marketplace.
If you want to sell your home now, or in a few years, and know that it’s outdated compared to similar homes nearby, doing a remodel can help you get a leg up on the competition.
Never Over-Improve Real Estate
The reason you need to be cautious about pulling the trigger on a remodelling project is that it’s very easy to over-improve your home. Over-improving your home occurs when you put more money into your home than you’ll ever get back when you eventually sell it.
Many people mistakenly believe that installing a $25,000 pool automatically adds $25,000 to their home’s value. Nope, unfortunately, that’s not how it works! You rarely get a dollar-for-dollar increase in market value from any remodelling project. So you have to be strategic about whether you should remodel in the first place and, if you do, which projects will benefit you the most.
Bigger isn’t always better. There is a misconception that the more improvements you make to your home, the more it will be worth. This isn’t always true, especially when your home is the most expensive home on the block. Many people prefer to buy a similarly priced home in a nicer neighbourhood rather than buy the most expensive home because nicer neighbourhoods are generally more desirable and therefore easier to resell.
Inexpensive Ways to Improve Your Home
When selling your home, consider inexpensive methods of improving its curb appeal before spending a lot of money on significant home improvements. If the first appearance of your home doesn’t instantly make a buyer think that your home is neat, clean, and well-cared for, it’s possible they will never make it through the front door.
Here are three tips for sprucing up your home without going broke:
- Repaint the exterior if any areas are peeling or discoloured. Painting your home is probably the biggest bang for your buck when it comes to remodelling. Paint is transformative and easy to do but inexpensive compared to other home improvements.
- Clean up the front entrance. The front door should be spotless because it’s usually the focal point of a home. Make sure your front porch welcomes potential buyers with a new doormat and healthy flowers or plants.
- Manicure the front lawn. Spending money on fresh mulch, new plant beds, and removing dead tree limbs will be worthwhile.
Should You Renovate Before Selling?
There’s no one-size-fits-all solution for deciding whether or not to renovate your home.
Sometimes it can make a lot of sense to renovate your home before selling; at other times, you’ll never recoup the total cost or see a difference in how fast the home sells.
When you spend real money now, you’re assuming that the buyer who is interested in your home wants that. “Trying to predict what the buyer will want with your own money is not a great way to operate, as opposed to finding the right buyer and talking through their concerns.
Homeowners who take on smaller projects that have universal appeal – like paint touch-ups or beautifying their front gardens – are going to benefit the most from their investment. At MJS Construction Group, we have the best dual occupancy selection to make your house a dream come true.
While there are home projects that can add value to your house, the easiest way to walk away with the most money in your pocket is simply by hiring a salaried agent who charges a fair flat fee, which will save you thousands of dollars in agent commissions. Our top-rated agents will be honest with you about what is worth fixing and what will have the best ROI but also diligently fight for you when it comes to negotiating a final price.