Property expert says to avoid 'quirky' renovations

author-avatar By
on April 14, 2021
Property expert says to avoid 'quirky' renovations

As residential building activity hastens, one housing affordability expert has warned against home renovators following trendy reality TV style cues.

Ian Ugarte, author of 'Small Is The New Big', said the trick is to use styles and finishes that appeal to a broad home-buying base, assuming home buyers are renovating to sell, rather than live in.

“While the glut of reality programs has seen a steady increase in renovating generally, deferring to trending styles that are at best ‘quirky’ and at worst just plain ugly, is likely to not only inflate the cost of the renovation, but also significantly limit buyer interest in the property,” he said.

"The last thing you want to do is limit or restrict your buyer base by introducing features like curved walls and floating beds that might have personal appeal, but are likely to alienate a chunk of possible buyers and potentially blow out your renovation budget in the process."

The fresh warnings come as the Australian Bureau of Statistics' (ABS) building activity data shows an uptick in residential builds, but to a lesser average value in the December 2020 quarter.

Private sector house commencements over the December 2020 quarter rose 26.6% compared to the September 2020 quarter, for a total of 33,761 private sector houses commencing.

This is a rise of more than a third compared to 2019's December quarter.

However, residential build value was $15.4 billion, only 2.6% up on the September quarter, and 1.7% down in value compared to the December 2019 quarter. 

Alterations amounted to just over $2.5 billion, up 3.1% on the quarter, and up 9.8% on the year. 

Mr Ugarte outlined some time-proof tips to heighten chances of a good return on renovation investment, including: studying the sold prices in the area, research planned and existing infrastructure in the area, creating a budget and sticking to it, and being realistic on how much growth is possible.

"Keep in mind that if you are planning on renovating, you're going to want to make a minimum of 20 to 25% uplift on your manufactured growth strategy," Mr Ugarte said.

“Like any form of investment, a renovation should be about making a profit – not just breaking even, or worse, losing money – and by carrying out this requisite research you’re best placed to ensure you’re not left short-changed once it’s done,” he said.

Building a home? Check out this handful of low-rate construction loans currently on the market.

Lender
Advertised rate Comparison rate Monthly repayment Rate TypeOffsetRedrawOngoing FeeUpfront FeesLVRLump Sum RepaymentAdditional RepaymentsPre-approval

VariableMore details
GET A DISCOUNTED GREEN RATE

Green Construction Home Loan (Interest Only)

  • Interest Only during construction
  • No monthly, annual or ongoing fees
  • Get Australia’s lowest rate construction loan when you go green
GET A DISCOUNTED GREEN RATE

Green Construction Home Loan (Interest Only)

  • Interest Only during construction
  • No monthly, annual or ongoing fees
  • Get Australia’s lowest rate construction loan when you go green
VariableMore details
FREE REDRAW FACILITY

Basic Home Loan (Principal and Interest) (LVR 70%-80%)

FREE REDRAW FACILITY
VariableMore details
AN EASY ONLINE APPLICATION

Yard Investment Loan (Principal and Interest) (LVR < 80%)

  • No application fee
  • Unlimited additional repayments
  • Unlimited free redraws
AN EASY ONLINE APPLICATION

Yard Investment Loan (Principal and Interest) (LVR < 80%)

  • No application fee
  • Unlimited additional repayments
  • Unlimited free redraws
VariableMore details

Rocket Repay Home Loan (Interest Only)

VariableMore details

Standard Variable Home Loan (Interest Only)

VariableMore details

Standard Variable Home Loan (Interest Only)

VariableMore details

Standard Variable Rate Home Loan (Principal & Interest)

VariableMore details
FAST TURNAROUND TIMES AND FLEXIBLE LOAN OPTIONS

Basic Investment Loan (Principal and Interest) (LVR < 60%)

FAST TURNAROUND TIMES AND FLEXIBLE LOAN OPTIONS

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to made on variables as selected and input by the user. All products will list the LVR with the product and rate which are clearly published on the Product Provider’s web site. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of December 7, 2021. View disclaimer.


Photo by Chastity Cortijo on Unsplash

Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered. Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site. Savings.com.au, yourmortgage.com.au, yourinvestmentpropertymag.com.au, and Performance Drive are part of the Savings Media group. In the interests of full disclosure, the Savings Media Group are associated with the Firstmac Group. To read about how Savings Media Group manages potential conflicts of interest, along with how we get paid, please visit the web site links at the bottom of this page.

Latest Articles

author-avatar
Harrison is Savings.com.au's Assistant Editor. Prior to joining Savings in January 2020, he worked for some of Australia's largest comparison sites and media organisations. With a keen interest in the economy, housing policy, and personal finance, Harrison is passionate about breaking down complex financial topics for the everyday consumer.

Collections:

Be Savings smart.
Subscribe for free money newsletters.

By subscribing you agree to the Savings Privacy Policy