Posts Tagged ‘Renovation’

Monika Bonet – Principal of Raine & Horne Glenelg is an agent that knows a great deal about period house styles gathered through her own experiences of reviving her own “Old House” in Glenelg South… but still she has asks the question … “is it really worth it?”

 If you believe the hype on TV renovation shows, it seems anyone can make a million by restoring an old building. But does it pay to buy a piece of Australian history and restore it with period precision?

 Monika Bonet is not convinced that you can renovate period homes at any cost. She cited a recent auction she attended of an authentically restored Victorian Villa in Adelaide’s eastern suburbs, where crowds flocked to view the house but no one bid for it.

 The villa was a labour of love for the owners… “but some people go too far,” she said. 

 ”There were beautifully restored ceilings, big original skirting boards and cornices. It was like walking through a museum. It’s probably one of the greatest myths that you can buy an old house and make money by restoring it to the glories of yesteryear.” 

 Monika Bonet went on to say; “The problem for the vendors selling the property was obvious… mainstream buyers don’t want to live in a museum environment – they don’t collect antique furniture and antiques, and they also didn’t care that the owners scraped back the old wallpaper and woodwork to find original colours”.

But despite the prospect of poor rewards, hundreds of people embark on heritage renovations every year because people love old houses.

 “Open inspection of period homes attracts lots of buyers, who adore these character charmers,” says Monika Bonet. “However my experience though is that it can’t be over-done, as most buyers live busy lives and still want all of the modern conveniences that many period homes don’t offer” she says.

“When presenting a period home for sale, it’s important to stage the home with a makeover of modern furniture and give the property a WOW factor. We do this with a mix of antique furniture and modern stylish furniture and accessories to accentuate the homes period features, to create an unforgettable first impression that will captivate potential buyers.”

 Monika Bonet says that however if you can buy a period property for a good price in an up-and-coming area, it can be personally and financially rewarding.

 In March, Monika Bonet sold a run-down Victorian Bluestone farm-house in Glenelg East, which although run-down was in demand by buyers that wanted to buy an old house to restore. “Ironically although this property was rundown with an overgrown garden, the house was structurally in good shape and really the villa just needed a cosmetic renovation.”

“But when we showed the villa to buyers, most just couldn’t visualise the villa’s potential and could not see just how little work the property really needed to bring it back to it’s former glory”  said Monika Bonet.

 “A young couple bought the property and they intend to embark on a makeover including replacing the roof, polishing floorboards, putting in a new kitchen and bathroom, plus repainting and landscaping. When finished they will have added at least 30% to the property’s value in the space of 12 months”

“Sellers can make around 20 to 30 per cent more if they sell well-renovated older-style properties,” Monika Bonet says, and extra funds are often available…. “Councils offer grants of up to $10,000 to certain [heritage] projects,” she says.

 But Monika Bonet, cautions: “Councils are principally concerned about retaining facades and rooflines. “So don’t try to fake it.”

 Should you have an “old house” and are thinking of renovating, before you start, call Monika for a FREE Appraisal to see what your home is worth, and get her expert opinion on what renovations you should make to an old home to maximise it’s potential selling price.

This article was brought to you by Raine & Horne Glenelg your Glenelg Real Estate Agents and Glenelg Property Management Experts.

A: An expertly completed renovation can add considerable value to your home. Yet with restrictions such as time and money, deciding where to start is a common issue for homeowners.

In terms of resale value – as well as everyday use – the kitchen and bathroom are generally considered the most important rooms. In fact, a recent Housing Industry Association (HIA) Kitchens and Bathrooms Report said the majority of consumers sought practicality and elegance from kitchen and bathroom renovations. 

However, the kitchen is generally regard­ed the home’s focal point and is therefore usually the best place to start. But be warned, a major kitchen refurbishment could be costly and complex, given it generally involves plumbing, cabinetry, design and electrical components. If cash is tight, then a coat of paint, some new lighting or bench tops can kick-start a relatively inexpensive kitchen overhaul. 

Bathroom renovations can range from respraying the enamel on the tiles, to a re-tile (expect to pay a few thousand dollars), to eliminating mould, adding a new shower screen or switching the elderly bathtub for a sprightly spa. 

This story was brought to you by Raine & Horne Glenelg – Your Glenelg Real Estate Agents and Glenelg Property Management Experts – We’ll look after You.

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Overall, Australians are now collectively spending millions of dollars every week on home renovations.

 

Raine & Horne Glenelg has produced this article to outlines some of the key issues to consider before you renovate your home. This report is based on the large wealth of experience that Raine & Horne has amassed through dealings with owners who have decided to buy a home for renovation purposes or sold a recently renovated property.

 

Common Mistakes Made By Home Renovators.

 

Mistake #1 – Getting Emotionally Involved

Many homeowners undertake a home renovation for emotional reasons. Very often they fall ‘in love’ with the property. This emotional issue applies to both home owners and investors. One of the biggest mistakes homeowners make when undertaking a home renovation is to overcapitalise their property.

 

Mistake #2 – Failing to Understand the Meaning of Overcapitalisation

According to the Royal Australian Institute of Architects; many homeowners are paying thousands of dollars only to devalue their homes. One of the ways they do this is by overcapitalising which means to improve a property beyond its resale value. Overcapitalisation means you spend too much money on the property and are not be able to recoup these monies if you decide to sell it. A simple example would be if a homeowner spends $150,000 on home renovations and then decides to sell the property. The homeowner may find that the value of the property has only increased by $75,000 meaning that they have effectively lost $75,000 through the renovations. In effect, they have over-capitalised the property by $75,000.

 

Mistake #3 – Not Doing Your Homework on Comparable Market Pricing

Unfortunately, it is important to recognise that most suburbs have a median sale price and an upper sale threshold specific to your suburb. Even different streets in your suburb have different price thresholds; that’s because your neighbour’s houses and the general streetscape have considerable influence on the value of homes in your street. Before renovating it is important to consider the housing styles, demographics of your suburb, and sale prices achieved of other homes in the area that have recently sold.

  
Mistake #4 – Under-Estimating all of the Costs Involved in Building

This is one of the biggest mistakes that homeowners make when renovating their homes. Homeowners typically under-estimate the costs involved in building. Such as; demolition costs, professional fees, contingencies for variations, foundation changes due to soil conditions, fit-out and landscaping, kitchens and bathrooms, escalation of building costs and delay and acceleration costs to finish the project on time.

 

Mistake #5 – Poor Selection of a Builder

Property owners who decide to employ a builder to undertake home extensions also encounter problems because they have not undertaken sufficient research on the experience of the builder, and their past record in undertaking renovations. Especially their “variation claims” history, often Builders locks unsuspecting homeowners into building contracts which cost homeowners thousands in variation costs. Another common mistake is to let the Builder provide the design, and therefore restrict the homeowner from getting competitive quotations upon the Builders design.

 

Mistake #6 – Doing it DIY to Save Money

Some people also make the mistake of trying to undertake home renovations themselves. This can prove costly in time and is financially unwise because a poor standard of work will only devalue the property. Character homes, in particular, require a higher standard of renovation work and you may need to carefully select tradesmen with past experience in this area to ensure that the work is properly completed. If you decide on a major renovation don’t cut corners doing it yourself. There is no such thing as a cheap renovation. Ultimately, it will impact on the resale value of the property or you will spend more funds at a later date to fix the original faulty work. Always seek competent, professional advice and trades people before undertaking a major renovation.

 

 

Mistake #7 – Failing to Stick to a Budget

A common problem is that home renovators do not operate with a strict budget and are unable to complete planned renovations because of a lack of money. This mistake results in homeowners financially overextending themselves through a lack of financial planning. The “Catch 22” is that renovators often can’t then sell their ‘half completed’ renovation and end up in severe financial hardship.

 

Mistake #8 – Poor Functional Design Layout and Design

A very common problem is that home renovators end up spending too much on a poor functional layout because of the limitations of the existing building. In many cases the homeowner would have been better off, to have demolished the existing house and start all over again. Another common problem is where the style of the renovation is inconsistent with the rest of the house; you’ll often see houses for sale with a modern extension that clash with the rest of the house which is still stuck in the 1970’s. These properties are “lemons” on the market and typically homeowners lose money on these renovations.

 

Mistake #9 – Spending Money on the Wrong Things

If you are living in $100,000 house you will not get a good return on an investment in a $35,000 bathroom. Swimming pools are a good example of additions to a property that often doesn’t add value. Many buyers do not want the work, expense, and potential for accidents that come with a pool. The general rule is that you should not spend more than 25 per cent of the value of your home on home improvement renovations.

 

Mistake #10 – Underestimating the Disruption to Your Lifestyle

Undergoing a major renovation and living through it, is often overlooked by most homeowners. The disruption to your lifestyle, the mess, the noise and restrictions is something that should not be discounted. If you are having major renovation (especially if you are a family with young children) consider moving out and renting elsewhere during the construction phase.

 

Before you make the decision to renovate or buy a new house, carefully ask yourself the following questions.

 

1. Decide what it is you are looking for in a final result and ask yourself if it will be cheaper to buy a different home or to renovate your old one.

 

2. What is the average selling price of homes in your area?

 

3. Will renovations alter the appearance of your home so that it appears out of place in the neighbourhood? Check the styles of other homes in the area. Keep in mind it might be a better idea to match or keep in step with the styles of other homes in the area. A poor design could devalue your home by thousands of dollars.

 

4. How much will renovations cost compared to what you paid for your home. What is the expected increase in value as a result of the renovations? Will the renovations actually cause your home to lose value?

 

The decision to buy a new home or to renovate is not one to be taken lightly. It is recommended that you think through every aspect of the project prior to getting started. Seek the advice of a local professional architect/building designer as well as a real estate professional if necessary to determine how the proposed renovations will affect the value of your home.

This article was written by Gary Pemmelaar. Gary is a Co-Principal of Raine & Horne Glenelg – Your Glenelg Real Estate Agents and Property Management Experts – We’ll look after You.

Gary is a Civil Engineer, and hold a Builders Licence in SA. He has considerable experience in both Property Develoment and Renovations. To read more see Gary in a recent article The Adelaide Advertiser run abou Gary.

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