Renovating your property for resale or investment purposes could devalue it significantly should your plans and construction be poorly executed.
While thousands of Australians look set to renovate homes and investment properties this year – an industry worth $20 billion annually according to Archicentre, the building advisory service of the Australian Institute of Architects – ill conceived plans and inappropriate materials can cause negative cash flow for investments as well as poor re-sale options.
Some key renovation mistakes include:
1. Poorly designed roof extensions on period properties
2. Houses painted in garish colours
3. Money poured into expensive bathroom and kitchen fittings at the expense of light and space
4. Changing a house’s market segment from one to another, for example converting a three bedroom house into two through building a walk-in wardrobe
According to Archicentre, a well planned and executed renovation or extension could see owners recoup their investment with perhaps a 50 per cent tax free capital gain.
Planning and costing a renovation to work within an available budget combined with a clear understanding of how to tender the work out and manage the renovation project is fundamental to the success if any renovation.