You may have considered it while piling the shopping bags on top of a cramped and dated kitchen bench, or perhaps it crossed your mind after a dog and a baby came along.
Whatever the reason, if your abode feels too humble, now is the time to take action.
Benefits of renovating
Renovations are soaring across Australia as homeowners shun exorbitant moving costs and spruce up their existing homes instad.e
Almost one in three Aussies has revamped their current place and this number is set to increase as a result of the cooling property market.
Though it may not be the best time to sell at present, periods of flat growth are never permanent so don’t procrastinate, renovate.
Investing in the future value of your property through a renovation can be a wise move in the interim as long as you’re prepared.
Increase property value
A well-designed renovation can add up to 10% to the value of your property.
For example, if your home is worth $500,000 and you spend $25,000 on the renovation, you have the potential to make over $50,000 when you put it on the market, which is double your initial investment.
However, property values can vary significantly, so it’s worth consulting a real-estate agent or conveyancer to get an indication of how much value your planned renovation could bring.
Spared the hassle of buying and selling
From stamp duty to legal fees and agent commissions, the costs associated with moving can be extensive.
Depending on the scale of your planned renovation, upgrading your existing property is generally a cheaper alternative.
Before going ahead with your renovation, make sure you finalise any outstanding quotes and work out a realistic budget.
It’s recommended that you add an additional 10% on top of the estimated price to allow for unforeseen costs.
Remodelling your existing home can be a great way to accommodate changing lifestyle factors such as a growing family.
You can boost your standard of living by making the following home improvements:
- Upgrading outdated fittings and appliances to better quality ones
- Reconfiguring the layout of your home
- Adding an extra room
- Replacing carpet or lino with floorboards
- Adding a pool or making outdoor improvements
Financing your renovations
Sometimes savings may not always be enough to cover the full cost of your planned renovation.
When this occurs, it can be a good idea to take out a personal loan to finance your project.
Personal loans are well-suited to renovations.
They are fast and convenient and come in two forms – secured and unsecured.
Make sure to compare personal loans online to ensure you’re getting the best possible deal.
For small- to medium-sized renovations, an unsecured loan can be a viable option.
This type of loan allows applicants to borrow between $5,000 and $30,000 for a term of one to seven years.
Keep in mind that unsecured loans tend to come with higher interest rates than most other loan types, as they don’t require a guarantee and can be riskier for the lender.
For more extensive renovations, such as a new kitchen or changes to your floor plan, a secured personal loan can be a better option.
These loans allow you to borrow up to $100,000 and require you to put up an asset such as your house or vehicle as a guarantee.
Secured personal loans tend to have lower interest rates and longer loan terms because of this additional security.
Line of credit
A line of credit is a convenient way of accessing funds only as you need them.
Much like a credit card, they allow you to withdraw money up to a predetermined limit.
The key difference is that interest is only charged based on what you owe, as opposed to the entire credit amount.
Rates also tend to be lower than credit cards.
A line of credit can be a good way of paying builders or contractors as the renovations progress.
Enhancing your current living space can potentially save you thousands of dollars in moving costs and can be a smart way of riding out the property market downturn.
When it comes to renovating, there’s no time like the present.
Source: Bessie Hassan, Money Expert, finder.com.au
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