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Tim Egan

7 Tips for financing renovations

August 30, 2022 by Tim Egan

Renovating your property is a great way to potentially drive up its value. If it’s an investment property, you may also secure a better rental return.

However, before you dive in, it’s important to weigh up the costs versus the benefit of renovating. Here are a few pointers we have put together to help you decide whether renovating is the right choice for you and the most ideal way to gain finance for renovations.

Work out your goals

Before renovating, think about your long-term goals. If it’s your home, do you want to stay put in the neighbourhood or are you likely to want a change of scenery in the next few years?

How does the prospect of selling and moving on compare to renovating and staying put?

If it’s an investment property, is the financial outlay of a renovation likely to pay off? (tip: talk to your financial advisor about your investment strategy).

 Speak to a local Real Estate Agent

Real estate agents have a great understanding of your local area and what home buyers and/or renters are wanting in a home. This information will help you decide on what rooms you need to renovate and what work needs to be completed to get the biggest bang for your buck and drive-up value.

 Create a budget

How much is it going to cost to turn your daggy yet loveable 1960s fixer-upper into a modern masterpiece? Plan your renovations and put together some costings. The general rule of thumb to maximise growth and minimise potential overspending is to spend no more than 10 per cent of your property’s value on renovations.

To help give you an idea, here’s how much you can expect to pay to renovate areas of your property that commonly add value for resale:

Kitchen Reno Costs

If your kitchen benchtop is an antiquated electric blue and your appliances sound like they are going to take off when you turn them on, it might be worth looking into a kitchen upgrade.

It’ll cost you, but it may be worth it if your goal is to sell your property eventually.

The best estimation to expect to pay for your kitchen reno is the following: 

$10,000 to $22,000 for a small or budget kitchen

$22,000 to $35,000 for a mid-range kitchen

$35,000+ for a high-end kitchen.

If you’ve got a good kitchen designer and spend $20,000 I’d expect it to be multiplied by three or four when the time comes to sell the property.

Bathroom Reno Costs

A flash new bathroom could be a real drawcard for future buyers or renters. Depending on factors like the size of your bathroom and the materials you choose, you may be looking to pay anywhere from $10,000 to $30,000+ for a bathroom renovation.

The Housing Industry Association found the average bathroom renovation cost $17,000 in Australia.

Repainting Costs

A new coat of paint can do wonders for an ageing property. The cost depends on the size of the property, whether you are doing the painting yourself or getting someone else in and which areas you paint (inside and outside). 

The average cost to paint the interior of a property is around $20 to $30 per square metre.

As a starting point, for a two-bedroom unit, that might work out to $2,500 to $3,500.

For an exterior paint job on a two-storey property, you may be looking at $5,500 to $20,000. For a roof refresh, expect to pay anywhere from $2,800 to $4,500.

How will you finance your renovations?

There are all sorts of different ways to finance your renovations. That’s where we come in.

You could top up your current mortgage or refinance to fund your reno project. Using funds in an offset account or making the most of a redraw facility could be another option. And in some instances, a construction loan or personal loan may work best.

Speak to us and we will run you through how each of these finance options works, and which may be right for you, based on your individual financial situation and goals. Get in touch today!

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