As a homeowner, renovations such as repainting or transforming unused garden space into an outdoor entertainment area can go a long way towards increasing the value of your home. Renovating your home or investment property can be a rewarding – but sometimes stressful – experience. The most important part of the renovation process is to create a plan to help minimise the stress and potential budget blowouts that can occur. Here are four ways to better manage your renovation budget to keep you from going insane:
1. Create a realistic budget: This is the most obvious, and important, part of the renovation process. How can you manage your budget without setting down the ground rules first? Creating a well-planned budget will give you an idea of how much you’re willing to spend, and where you’re able to make exceptions along the way. A good rule is to budget an extra 10% on top of what you’ve calculated your renovations to cost to give way for the unexpected – that way when something happens, you’ll know that you’ve budgeted for any surprise costs!
2. Save smart: Once you’ve figured out how much you can afford to spend, it’s time to get saving. Try and commit to putting a certain amount of your wages into a savings account that offers bonus interest, and make sure that you cut back on luxuries and splurges. Remember, renovating can add value to your home, so when time comes to sell up or get your property tenanted, it will have been well worth it!
3. Speak to the experts: Watching The Block on television every night doesn’t exactly make you a renovation whiz (especially when you’ve never renovated before), so make sure to get as much tips as possible from the experts! The best way to do this is after you’ve created your budget, so they can recommend whether you’re on the right track. Don’t be shy – ask plenty of questions and make sure you feel confident in their experience and knowledge before you commit to spending a lot of cash!
4. Track your spending: There is absolutely no point is taking the time to create and plan a budget unless you’re going to consistently review and track where your money is going during the renovation process. During renovations, it is especially easy to blow it out, so create a simple spreadsheet with the help of your builders and contractors to ensure that everything is going according to plan. Once a certain part of the project is completed, assess the estimated costs against the actual costs, and if you’ve got anything left over, you can allocate it to other areas of the renovation.
If you have a time crunch and need the renovations to be completed before you have the chance to save enough, you may wish to consider taking out a renovation loan. As with any financing option, it is important that you consider how much you can afford to borrow and whether the renovations will add value to your property. It can be easy to get carried away with home improvements and you may run the risk of over-capitalising, that is, spending more than you can recoup when it comes time to sell your property.
An EasyPlan mortgage broker will help you find the right financing option to help transform your house into a home, while staying within your budget.
Give them a call today on 1800 888 845, or enquire about a personal loan here!