Have you considered renovating your investment property to increase your returns?
Well..in one of his columns in Switzer last year, John McGrath gave an interesting take on the advantages and challenges of DIY renovation.
He makes some interesting points I hadn’t heard discussed in this context before, so here’s what he said…
Countless TV renovation shows and magazine articles on reno-for-profit success stories are a constant inspiration for many do-it-yourself renovators.
But as anyone who has tried it will tell you, it’s not as easy as it looks.
There’s no question that a well-costed, well-planned renovation can add significant value to your home or investment.
Renovating can also be great fun and you can be very creative with it.
But research shows things don’t always go to plan.
A 2013 CommBank survey of 1,000 renovators found 60% experienced cash shortfalls and delays and only 46% believed the value of their property had increased by more than the cost of the renovations.
Here are my thoughts on the pluses and pitfalls of DIY renovating:
- The most obvious plus is savings. If you’re willing to put in the work, you can save some serious money – but only if you have the skills and knowledge to achieve the right outcome
- If you have the time to shop around, you can save more by comparing prices, buying at auctions and sourcing all the materials yourself
- Many people find renovating fun. If you’ve done it before with success, then go for it.
If you haven’t done it before, start with something small like painting and see how you go – you might discover that what looks like fun on TV, might not be fun for you in real life
- It’s likely your costs will blow out, but you can avoid this somewhat with good planning
- DIY renovations are obviously going to take longer. How much spare time do you really have for this project?
- Living in a property while renovating can be inconvenient, especially if you’re doing a major overhaul. Are you willing to live with the dust and mess?
- Risk of injury. On larger projects, DIY renovators are dealing with power tools, heavy materials such as bricks and appliances; and chemicals such as solvents
Let’s talk about the injury side a bit more, as this is really important.
The Monash Injury Research Institute in Victoria says 15 people die and about 2,000 are seriously injured every year due to DIY work.
One in three patients visiting emergency rooms have hurt themselves doing something in the house or backyard.
You might think something simple like painting can’t do you any harm but that’s not necessarily true.
For example, did you know that many older homes were painted with paint containing lead, so once you start sanding that back, you’ll be inhaling that dust.
Here’s the big one to be aware of – asbestos.
According to the Asbestos Safety and Eradication Agency, 1 in 3 Australian homes have asbestos.
If your home was built before 1990, it’s best to have it checked out before you start renovating.
There’s some great information on how to go about this at www.asbestossafety.gov.au.
You can also call the National Asbestos Hotline on 1800 888 468.
If you’re a fan of The Block, you’ll remember that the contestants hired professionals to do a lot of the work.
They chipped in where they could and did all the fun stuff such as picking colours, lighting, floor coverings and appliances while the professionals did a lot of the labour.
I think this is probably the best approach.
Get a few quotes for each job and check each tradie’s licence.
Also, read up on home warranty insurance requirements in your state and contact your local council for approval if you’re doing anything big, such as extensions.
Most importantly, have fun with it.
YouTube videos are great when you need some instruction and pretty much any question you have can be answered with a simple Google search.
It’s also worth talking to a local agent and/or your investment property manager.
Ask about which improvements will add the most value (or rental yield) and discuss some ideas.
A good agent will be more than happy to visit your home, free of charge, to offer their advice.