A good friend just bought her first property, in the form of a rundown renovator’s dream in inner-Brisbane. She’s keen to get stuck in straight away, with grand plans for a full-scale overhaul, but when I asked about her project budget she just gave me a blank stare. Oops… she doesn’t have one.
BY SHANNON MOLLOY
My friend’s brave foray into the world of renovation reminded me of my own early experiences. When I embarked on my first project, I was a typical 20-year-old: ambitious, but totally clueless. Over the next two years, I fumbled my way through with no plan, no budget, no contingency and no idea.
I was lucky. Thankfully, the apartment I’d bought didn’t require a complete overhaul and was located in a great suburb close to schools, transport and shops. As a bonus, I didn’t completely botch the job either. When I sold a few years later, the market was up and I made a tidy profit.
Renovating can be fun. It’s a chance to inject real value into your investment, while completely changing the face of it. However, it’s very easy to get carried away – and, sometimes, not even notice you’re halfway down the garden path.
These are a few of the things I wish I’d known when I kicked off my first project.
Set a specific budget
Rather than relying on a rough idea of what you’d like to spend overall, break it down into categories and be specific. Do some homework and figure out what’s required, what you reasonably need to spend and how much you can afford on each area. If you really want to watch your pennies, go room to room and price every single expense – right down to the kitchen tap.
Build in a contingency
When calculating your budget, work in a 15 per cent contingency in case of unforeseen costs or blowouts.
Only fools rush in
Perhaps it’s a generational thing that only applies to us younger investors, but the temptation to do everything all at once can be a bit hard to resist. Take your time and tackle one element of the renovation, when money and time permit, before moving on to the next. Taking on the whole lot right now will only leave you overwhelmed and smack bang in the middle of a much, much bigger construction site.
Don’t get personal
It’s easier said than done, which I know too well, but becoming emotionally attached to the property can lead to problems down the track. If you treat it strictly as an investment from the very start, it’ll allow you to be more cutthroat when it comes to tough decisions.
Mates’ rates versus actual experts
That friend dating a guy who has almost finished his apprenticeship – don’t let him install your bathroom vanity, even if it saves you a bit of cash. Use a licensed professional for technical jobs. Or else, get used to shaving over the kitchen sink for a month.
Take home a test pot
The paint colour you pick at the store might look completely different on your walls at home. That nice white with a hint of grey could wind up resembling a very bold baby blue, depending on factors like natural lighting. Take home a test pot and see if the sample is really what you had in mind.
‘So right now’ soon becomes ‘so yesterday’
Textured paint feature walls, pastel kitchens, lino floors… remember those trends? They were once “very now”. When it comes to a renovation with profit in mind, go with a look that’s modern but won’t date quickly. You want buyers to walk in and imagine how they’ll make your property their new home, rather than focus on bizarre or confronting design choices they totally hate. Save the great ideas inspired by glossy magazines for your own home.
It’s a business
Know your market, understand your limitations, have a thorough plan and stick to it.
What advice would you share with your novice renovator past self? What tips and tricks have you picked up since your first project?
Shannon Molloy is the deputy editor of Australian Property Investor magazine, www.apimagazine.com.au