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Home Improvement Projects: How to Budget

When deciding to sell, making the decision to renovate your home is a proven way to add that extra value to your property. An important factor to ensure you receive an offer on your property that you are happy with would be to seek out and property valuation conducted by a senior property valuer that can ensure you are provided optimal value without the overbearing expenses and to avoid any over capitalising. 

Home improvement projects can be tedious and expensive, even the smallest changes can make a big difference on your property’s value. Whether you are wanting to purchase a new property and would like to know if renovating would be beneficial for your finances if you decide to sell further down the road. 

If you are wanting to sell your property and know that there are a few improvements that need to be made if they are worth spending the extra costs, this may impact your decision as well as the potential of adding value to your property and gaining a profit on your investment.

Before anything, we suggest speaking with an expert professional in the field of valuations. An independent property valuer will conduct a valuation on the property taking in all factors relating to the rates, size of land and building, location and any external factors that may be involved. 

Budgeting for home repairs and improvements is a great way to get your finances in order before diving headfirst into renovations and then not being able to complete the process due to your finances. 

Like most homeowners, there are always projects to do, whether it’s giving the property a new coat of paint, flooring, cabinetry and even taking the time to give the outer appearance of the property a good clean. So, you might be asking yourself, how do I budget for my home improvement projects? And making the space more inviting as well as adding value to the property?

Here are a few tips that can help get you started! 

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Create A Budget Category

When you’re deciding on your home renovation budget, and building the cost around each individual project, it can be easier and more affordable to prioritise certain projects based on each room or area within the property. 

To determine how much you should spend on a home renovation/improvement, to get an approximate idea of what you’re averaging in costs, you would need to consider the value of your property prior to any changes. It’s recommended that you don’t want to spend more than 10 to 15% of your home’s value in regard to the individual rooms. This is where a property valuation comes in handy to determine the current value of the property and the best way to start budgeting on the areas of concern based on the valuer’s comprehensive report.

Financing 

Before you can start setting a budget, you would need to determine how you are planning on paying for these renovations, whether it’s in cash, taking a loan or applying for credit. The available funds will be your limit of how you would budget for these improvements. Once you have calculated the amount available to spend, there are always unexpected costs involved, it is important to be prepared for something to go wrong, we suggest you set aside 10 to 20% of the budget to cover these unexpected costs.

Quotes

80% of the time homeowners are requesting quotes for certain projects that need completing around the house. Like most people, there are numerous costs to keep up with as a homeowner, not to mention mortgage repayments. Keep an open mind to all the costs that could be involved, as you might ruin the chances of getting anything done, if you tell yourself, you can’t afford these improvements. 

Take the initiative to get realistic quotes, as most contractors or businesses will give you free quotes and this will be a contributing step to start planning how much you would need to save or put aside for the improvements. 

Tips for Saving

To further reduce the costs in your plan, depending on the project, outsourcing a contractor can be an additional expense that can chew into your budget, meaning you would have to cut out a few of the projects to fit the budget. 

We recommend that doing the work yourself could be a big cost saver. As long as no expertise is required, this can reduce labour costs if a contractor is not needed. Ordering fixtures and finishes yourself, being your own project manager as you have a better understanding of the property and the vision you have in mind for the renovations. And lastly, painting, to have a room painted by a professional will have you $300 plus out of pocket. 

Taking the initiative to complete these tasks yourself will help reduce the costs and might save you thousands at the end of your renovation. Deliver that ‘wow factor’ to potential buyers by creating a point of difference, which will make your property stand out from the crowd!

When preparing for a sale or purchase of a property, you want to be doing everything you can to ensure you are able to maximise the potential value of your property and how it would impact your finances.

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It’s important to take the time and ensure you’re on the right path. With over 20 years of experience, our independent property valuers will paint a detailed and accurate picture of your financial potential to steer you in the right direction. Our property valuations are conducted with the highest of standards and quality giving you peace of mind whether you’re an investor or owner of a property, guaranteeing you will make an informed decision prior to any changes of the property and your finances.

Author Bio 

Adam Smith – LinkedIn Profile 

Adam Smith is an expert property valuer with decades of experience working within the Adelaide real estate market. With his specialised skillset in large scale Commercial and Industrial property valuations, Adam is dedicated to sharing his knowledge by engaging in industry education at conferences and seminars. Adam is a Certified Practising Valuer and an Associate Member of the Australian Property Institute (API).

Edward

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