To build or renovate: That is the question

All you need to do is watch TV to see the popularity of renovating in this day and age. DIY is seemingly as simple as ABC, and with stores like Masters, Bunnings and IKEA promoting self-assembly projects, one could easily assume that renovation is the ultimate ‘cheap’ option.

But before you load up your IKEA trolley, consider the following:

Are you bound by any laws?

Historic homes often have many more restrictions on renovation and design, which are aimed to preserve the character and heritage of the home. If you own a heritage-listed property, your only bet may be to renovate, according to those restrictions – whatever the cost.

However, if you have a more contemporary home, you may have the luxury of weighing up renovation versus a knockdown/rebuild project.

To find out where you stand, obtain a copy of your title and local planning certificate.

Are your concerns structural or aesthetic?

It can be relatively cheap and easy to update the attractiveness of a home, but the same cannot be said for all structural changes.

If you are looking to change the layout or floor plan of your home, you need to consider the hidden costs of getting the work done.

These costs can include architect design fees, local council approval fees, demolition and removal fees, builder and engineer fees, survey fees, sub-contractor fees, and even possibly legal fees – and that is all before you’ve even factored in the cost of the building materials!

A savvy budgeting plan will help you identify the hidden costs associated with a renovation project so you can decide the best step in moving forward.

Are you handy?

While home renovation shows like Better Homes and Gardens and Selling Houses Australia make renovating appear a breeze, it really takes the right tools, skills and knowledge to get the work done right the first time.

If you’re not a handy person, chances are you’re going to be forking out for contractors every step of the way. These costs can add up very quickly, especially when design changes are involved. Do your research and remember to use only licensed professionals.

When things go wrong

When considering a renovation, be sure to factor in a potential blow-out cost. Quite often, insurance policies exclude cover for damage due to a renovation, so it helps to know what you may be up for.

Also, things that look good on plans may not work as well in reality, and you may be required to adjust your design accordingly. This can cost significant dollars as the changes could impact your architect, builder, contractors and material suppliers.

A general rule of thumb is to double your budget to give yourself some wiggle room.

Can you get finance?

While renovating on the cheap is all the rage, lenders these days are somewhat reluctant to provide finance for extensive renovations. This is due to tightened lending overall in a post-GFC climate. You’ll need to speak with your finance provider to determine what they are prepared to finance and how, and this may impact your decision on whether to renovate or detonate.

A clever budget and loads of research will help you decide whether your best option is to renovate or rebuild. Start by talking with a licensed builder or engineer – they may be able to give you some tips that could save you a world of hassle down the track.