Renovator's delights must be done right

A climate of fast-growing property prices offers opportunities to make money through renovations, but there are risks to watch out for, warns building adviser Archicentre.

Archicentre's Queensland spokesman, Angus Kell, says Australian Bureau of Statistics figures show house prices climbed by an average of 13.6 per cent across Australia's capital cities in 2009.

In such a climate, renovators who do their homework, buy the right property and plan carefully can make money, Kell says.

"The current situation places the focus on careful planning to locate the 'renovator's delight' and on working through a realistic plan for the renovation which is affordable and well designed to capitalise on the structure of the property," he says.

It's also important not to pay too much for the property at the outset, he notes.

"With housing prices being driven up through a lack of supply and high demand, even rundown properties are becoming the subject of hotly contested auctions."

He says some purchasers could find they've paid a premium price for the property and then face extra unbudgeted costs if surprises arise, especially if they haven't carried out pre-purchase inspections.