One of the most effective ways of increasing the value of your property is by investing in a home renovation. Indeed, home renovations can bring about significant improvements to your property which will surely be noticed by potential buyers.
If Houzz’s latest State of the Industry Report is anything to go by, renovations are more lucrative now than ever before. The report surveyed businesses in the building industry and revealed that 39% found 2016 to be their best year, 9% found it to be their second-best year and 19% found it to be an above-average year.
While this is great for the industry, as a homeowner, your goal will be to keep costs at a minimum. Architects, builders and building designers are obvious expenses that most homeowners factor into expenses. However, there are many other less obvious expenses that often blow out the most carefully planned budgets.
Over the years, I have seen how drastically hidden costs can impact a project. So, today we will look at these hidden costs to ensure your budget remains within a buffer of 10-15%. Continue reading and hopefully when you’re done, you’ll be better equipped to plan your budget and keep costs to a minimum.
1. Relocation costs
If there’s one thing I’ve learnt from customers at Ross’s Discount Home Centre, it is that relocation costs are often not included when planning a home renovation. In most cases, it just isn’t possible to stay in a property that is undergoing a renovation. Home renovations are messy and they serve many inconveniences that make a property unlivable. To give you an idea, you may have to spend weeks without a kitchen, plumbing or electricity in particular areas during a renovation.
Smart renovators always consider moving out before the tricky parts of renovation starts. However, this also brings about the costs of its own. Moreover, it is not always convenient to spend long periods with relatives or friends.
If your home renovation project includes work with plumbing, electricity or the kitchen, consider moving out until the work is complete. Consider the size and scope of your project and make sure to budget for your relocation costs if you have to relocate.
2. Council permits and certifications
Depending on where in Perth you live, you may have to obtain several council permits and certifications for your renovation. It is extremely important to obtain these approvals before your renovation kicks off. Otherwise, you may end up paying hefty fines or risk your project from being stopped by surprise inspections.
Also, the cost of certifications and permits also varies from one council to another. Costs may range from a few dollars up to hundreds of dollars. Make sure to do your research before you begin and budget for it accordingly. You can visit the Department of Commerce website for more information about permits and certifications in Perth.
Most people are under the impression that home renovations do not carry any tax implications. However, this is only true if you are making improvements to your primary residence. If you are renovating an investment property, then there are several tax implications.
Depending on the type of renovation being carried out, you will be subject to GST and capital gains tax to name a few. Taxes will also depend on the value of your property, so make sure to check for taxes before your project kicks off. Tax implications can be massive, so you must plan and budget for them beforehand. You can find out what expenses you can claim from the ATO’s website.
4. Equipment and material costs
Unless you’ve managed a home renovation before, chances are that you won’t have the required tools required for the job. Depending on the size and scope of your renovation, you may have to purchase a few or several tools. The cost of new equipment can easily add thousands of dollars to your budget!
You can also consider hiring tools instead of purchasing them. However, hiring means that you will have to be careful with your schedule. Renovations always meet roadblocks and delays and it will only result in costs going higher. Look at websites like Bee’s Hire if you’re planning to hire tools.
And if you’re looking to purchase home improvement products for your renovation, consider us at Ross’s Discount Home Centre. We offer everything ranging from tiles, kitchen and laundry products, bathroom products, tapware, home appliances, doors and windows, office furniture, wheelbarrows and trollies and much more, all at very affordable prices! You’ll find everything that you need under one roof at our store. By purchasing your materials from us, you will reduce your costs significantly.
5. Structural costs
If your home renovation is a fairly large project, then you may have to carry out structural changes. Now, structural changes require careful planning, research, design and construction, monitoring, inspection, maintenance and demolition. These are highly specialised tasks which you simply cannot carry out yourself. You’ll need to hire a structural engineer to help you out in such cases.
Hiring a structural engineer does have its costs. Moreover, depending on the size and scope of your project, you’ll have to bear several structural costs as well. Do your research to determine how much an engineer will cost you. Once you’ve done this, your engineer can help you budget for all structural costs.
6. Unexpected repairs
I’ve heard horror stories from customers who have completely blown their budget during their home renovation. And they all had one thing in common – they had to carry out repairs during their project. Unexpected repairs can blow any budget out of the water.
Even if you’ve managed a renovation project before, there is always an element of uncertainty associated with them. It isn’t always possible to foresee if any repair work will be needed during the renovation project so these must be factored into your budget.
I recommend adding a 10% contingency cost to your overall budget for such issues. While this method works for most cases, in some cases repair costs can exceed this budget. Nevertheless, this is one of the best ways of keeping unforeseen costs within your overall budget.
7. Site works
Sometimes, your home or property may require some work before a renovation can start. Site works may include the use of heavy machineries such as cranes, tractors or excavators. It can also include building retaining walls, flattening the land or clearing out trees. All such site works have costs associated with them which must be considered. You may also require council approval for specific types of site work.
Depending on your particular project, try to determine if you need any site work ahead of your renovation. If you do, obtain quotes from a firm well before you start your renovation, otherwise, you’ll run the risk of having your budget skyrocket.
Finally, splurging is a fairly common cause of renovation budgets being blown out of the water. I’ve seen just too many people who draw up a realistic budget but fail to stick to it during their renovation. Often, these people fall prey to splurging and they get sucked in by options that seem slightly better than what they’ve chosen.
While spending a little extra may work out to be worth it in the long run, splurging on every aspect of a renovation is a big mistake. To keep home renovations within a budget, splurge only on aesthetics or flooring, if on anything at all. For example, it’s okay to splurge on your splashback tiles, bathroom vanities or kitchen benchtop. These will immediately increase the visual appeal of your home and appreciate the value of your property. However, if you splurge on anything and everything, I’m sorry to say that you’ll have a hard time keeping your project within your budget.
Home renovations are massive projects and they certainly don’t come cheap. Moreover, there are several hidden costs associated with renovations which most people fail to take into account. These costs can easily blow a carefully planned budget out of the water.
Hidden costs may include relocation costs, council permits and certifications, taxes, equipment costs, structural costs, repair costs, site works and splurging. You should always be aware of these costs and budget for them before your home renovation project starts off.
And, for all home improvement products that you need, look no further than Ross’s Discount Home Centre. We keep in stock a massive inventory of products in our showroom in Guildford. Simply drop by our store or check out our online store to find everything that you need in one place. What’s more, our products are available at incredibly affordable prices. We even offer free delivery across Perth Metro and offer a 14-day money-back guarantee on all products!
So, what are you waiting for? Drop by our showroom or shop from our online store today!