The idea of renovating your home or investment property is always exciting. Whether you try to add value to your investment property or to add a touch of your personality to the home, or simply just want to make it more comfortable for yourself or your tenants, renovations are expensive.
1. What are the costs associated with renovations
With a mortgage broker in your corner, the next step is to investigate how much you need to borrow. Work out the specifics of your renovation, what the average cost to renovate is in your area and how much you are eligible to borrow. You should aim to spend no more than five per cent of your property’s value on renovation.
Once you decide to renovate, if you are trying to add value to a house to resell, it is important to look at the rooms and areas that will add the most value.
The following are average renovation prices, however prices will fluctuate based on the city and suburb.
If you are a fan of the show The Block, you will know kitchens sell houses. According to realestate.com.au, the average renovation cost you should be spending on a kitchen is between $12,000 and $16,000.
The average bathroom space in Australia is six square metres. Look to spend around $9,000 – $12,000 as the bathroom is a highly trafficked space and needs to appeal to a wide variety of investors.
An extra bedroom or a deck outside both add appeal and improve the standard of living for the homeowners.
If renovations are likely to take over your living quarters you may need to also consider the additional cost of accommodation for the renovation period.. This is another cost to factor into your budget.
The final hurdle to look at is the council fee. The council can charge you up to $2,000 for an application fee, although prices can vary. After speaking to a broker and finalising the renovation, make sure you account for an extra 10 per cent in your funds, to cover any unexpected costs.
2. Do you need to borrow money?
If you need to refinance or take a new loan, make sure you are dealing with an experience mortgage broker who recommends solutions that benefit your long-term goal, rather than hindering future plans. Your Mortgage Corp home loan experts can help you reassess your current financial position, run through your plans and future payments, and decide if you can afford to take on more debt.
3. Deciding on the type of loan
If after the assessment and investigation you decide to borrow money to renovate, there are three types of loans to consider to help refinance and renovate your house: increasing your existing home loan, a line of credit loan or a construction loan
To make sure you get a great outcome, speak to an experienced 5-star mortgage specialist.
About Mortgage Corp
Based in Mount Waverley, Melbourne, Mortgage Corp specialises in helping successful professionals and property investors access discounted premium rates, minimise loan approval red tape and apply strategic loan structuring for long-term investment success.
Unlike many mortgage brokers that may be able to help you with general loans but simply don’t have the skills, experience or resources to genuinely help property investors maximise long-term wealth, Mortgage Corp loan specialists help investors develop a strategic approach to property investing for long term investment success. Book a FREE Consultation today to discuss your financial goals!