Renovating can be a great way to add value to your property, improve your living space, or boost your rental return. But before you start knocking down walls, there are a few key things to consider. A renovation can quickly turn from a smart investment into a financial headache if you don’t plan properly.
Here’s what to think about before diving in.
Know your goals
Before spending a cent, ask yourself: Why am I renovating?
If it’s your home, think about whether you’ll stay long-term or sell in a few years. If you’re flipping or updating an investment property, focus on maximising value without overcapitalising. Understanding your goal will shape your renovation choices and your budget.
Plan your budget (and stick to it!)
How much will your renovation cost? More importantly, how much should it cost?
As a general rule of thumb, spend no more than 10% of your property’s value on renovations. Costs add up fast, so get multiple quotes and budget for unexpected expenses – they always pop up!
Are you overcapitalising?
Every suburb has a price ceiling – a maximum price buyers are willing to pay. Before you renovate, research what similar homes in your area sell for.
If you spend too much, you risk pricing your property out of the market and losing money when you sell. Try to focus on renovations that deliver a return, such as:
- Kitchen and bathroom updates
- Fresh paint inside and out
- Extra bedroom or ensuite
- Storage solutions
- Outdoor entertaining areas
Luxury finishes and expensive fittings might look great, but will buyers pay extra for them? Keep your upgrades practical and aligned with market demand.
How will you finance your reno?
There are several ways to fund a renovation, depending on your budget and plans:
- Refinance or top up your mortgage
- Use redraw or offset account funds
- Consider a construction or personal loan
Not sure which option suits you? We can help you find the best way to finance your reno based on your goals.
Final thought: plan before you renovate
A successful renovation is all about planning, budgeting, and making smart choices. Whether you’re upgrading your home or renovating for profit, focusing on high-impact, cost-effective improvements will give you the best return.
Thinking about renovating? Let’s chat about how to finance your project the right way.
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