Most common renovation mistakes and how to avoid them

Renovating a property can give you or your tenants a more comfortable place to live, and potentially help to improve its value for easier refinancing or selling in the future. But there are also some easy mistakes to make that could affect both the results of your renovation project and your financial future.

Some of these common renovations mistakes may include:

Setting an unrealistic budget 

We’ve all seen how the people appearing on those renovation TV shows regularly blow through their budgets. Unfortunately, the rest of us can’t call on the resources of a TV show to help us out if we overcommit to a renovation project.

It’s important to do your research early on and compare quotes from expert tradies to get a realistic idea of how much your renovation project could cost. Once you have this estimate, you can look into how you plan to cover the cost.

Some options could include:

• Dipping into your savings or your offset account
• Redrawing extra repayments from your mortgage
• Taking out a home improvement personal loan
• Refinancing your home loan to access your equity

Forgetting to set aside a cost buffer 

Even the best-planned renovation budgets tend to blow out, much like on TV. This is because your project may not go quite as planned – a pipe may burst, a cupboard may not fit, or a fixture may not properly connect to your plumbing.

Some renovation experts recommend leaving a buffer in your budget to prepare for unexpected expenses. The exact amount you’ll need may vary depending on your project and financial situation, but a buffer of around 10 per cent of your budget could help you manage extra costs.

Attempting to DIY jobs that really need an expert 

You may fancy yourself to be a little bit handy, and be on a first name basis with the people working in your local hardware store. Depending on the scope of your renovation project, this may be all you need to get the results you want.

However, you can’t always Do It Yourself – sometimes you need a professional. Trades such as plumbing and electrical work often require specialist tools, knowledge and experience to be performed safely. It may cost a little more money, but getting quotes from expert tradies with good references could save you a whole lot of hassle and lead to more professional results, which may also be guaranteed by the builder’s insurance.

Choosing styles that date quickly 

You may want your home to reflect your unique personal style, and may plan your renovation with this in mind. However, styles and fashions change over time, and home features and improvements that appeal to you may not appeal to future buyers. This could make the property more difficult to resell or to attract new tenants in the future.

For example, rather than painting each room a different colour to give each area its own theme, you could instead consider sticking to a single, simple, more neutral palette throughout the house. Rather than making the house look dull, this could instead help a future buyer or tenant to project their own personality onto the space, increasing its appeal to them. And keeping the renovation’s look relatively neutral could help it to maintain its appeal for longer, even if styles change over time.

Not designing for your future buyer 

As part of thinking about the future when you’re planning your renovation, you may want to think about the type of buyer that your property may appeal to. Renovating with future buyers in mind could help to enhance the property’s appeal, potentially encouraging motivated buyers to bring their best possible offers to the table.

For example, if you’re renovating the bathrooms in a property that’s likely to appeal to a young family, removing the bathtubs in favour of walk-in showers could make the property a bit less appealing, as it may not be as easy to bathe small children without a bathtub.

Overcapitalising 

One reason that many homeowners undertake renovation projects is so that they can increase the value of their property. This could lead to a higher sale price in the future, or improved equity that could make refinancing or purchasing another property easier.

While it’s important to consider spending money on quality materials and design, it’s also possible to spend more on a renovation project than the extra value it’s likely to add to the property; a process known as “overcapitalisation.” To avoid overcapitalising and effectively losing money on your renovation, it’s important to do your research and consider both your renovation budget and how much value you can realistically expect the project to add to your home.

For example, if you have a one-bedroom apartment that you bought for $500,000, but one-bedroom apartments in your area rarely sell for more than $600,000, then you may choose to set a maximum renovation budget of less than $100,000 to help ensure you can recover your costs.

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