Get Bang for Your Buck: Top tips to bring your renovation in on budget

It’s no secret that home renovations are expensive, but with a savvy approach to your project, your renovation can increase the value of your property, thus ensuring you get a return on your investment.

It’s also no secret that it’s very easy to overspend on a home renovation. After all, shiny new things cost money and we can all be a little magpie-like when it comes to wanting new. On a home renovation, those new things can cost… a lot! And when you pay too much, the return on your investment gets less and less.

To avoid blowing the budget and overcapitalising on your home renovation project, our team of Renovation Consultants in Manawatu have shared their top tips to give you bang for your buck!

What does it mean to over capitalise on your home renovation?

A renovation can add value to your property in a couple of ways. One is by enhancing your living space, making it more suited to your current lifestyle and therefore easier and more enjoyable to be in; the other is by increasing your home’s monetary value, thereby increasing the value of your asset.

Overcapitalisation happens when a homeowner invests more money into a renovation than they’ll get back in the sale or increased value of their home. 

Tips on how not to over capitalise on your home renovation

The good news is there are ways to avoid blowing your renovation budget and not spending more than you need.

Work with professionals like Refresh Renovations

When you work with our local expert Renovation Consultants in Manawatu, you’ll have guidance throughout your entire project. These professionals will work with you to determine the budget you’ll need for your renovation. If you are renovating a house on a budget, your Renovation Consultant can work within your budget parameters and will advise you on the best way to allocate your funds towards different parts of the project.

An added bonus of working with our Renovation Consultants is that they’re local. This means they have a good understanding of the market and know what will increase your home’s resale value.

Identify what kind of properties sell in your community

Local renovation experts will know the major selling points of properties in your area. They can steer you towards renovations that will have the greatest return on investment in your neighbourhood.

You can do your own research as well to find the key characteristics and features of homes that sell in your community. Kitchens and bathrooms are the first areas potential buyers pay the most attention to, so you may prioritise these renovations over other areas in your home.

Keep your home’s appeal neutral

Avoid adding amenities or features that might be hard to sell. For the best resale value, it’s best to keep your home’s appeal neutral. For example, an ultra-customised kitchen might work well for you, but too many custom features may deter prospective buyers.

Another example of this is a swimming pool. You may think this is a fantastic selling point, while others might not like a pool on their property for the extra maintenance. Your local Renovation Consultant will be able to tell you which features are worth the investment.

What you should consider when planning a renovation

Here are five things to keep in mind as you plan your next renovation.

Your home’s current value

Get an assessment of how much your home is worth right now. It’s relatively quick and easy to get your property appraised, and it pays to know that value so you can make informed decisions about your renovation spending.

Budget

Decide on the amount you’re comfortable to invest into your project. It is important that you do not overextend at the risk of a budget blowout. Plan how to finance your renovation as well. This could be by taking out a loan, applying for credit, or paying cash.

• How do I estimate my home’s renovation costs? It can be tough to plan a budget before you have some idea of what the renovation could actually cost. As a rule of thumb, you won’t want to spend more than 10 or 15% of your home’s current value on a renovation.

Goals for your home renovation

Is your main reason for renovating to sell your house or to improve your lifestyle for more years at home? Understanding the answer to this question is critical when it comes to choosing which type of renovation to plan. 

• Know what type of improvements bring in the cash. Your Renovation Consultant can help guide you towards the renovations that have the best resale value in your area. Typically, innovative kitchen and bathroom renovations see a greater return on investment in part because they see the most wear and tear over time. 

Builders

Be picky when it comes to builders, as you want to ensure they’ll produce exceptional work. A low-quality job could end up costing you down the road. Trust professional renovation experts at Refresh to provide a network of reliable tradies in Manawatu to work on creating a stunning renovation for you.

Your renovation company

Save time, money, and hassle by hiring professionals at a renovation company like Refresh to help you plan and stay within your budget, choose and manage a team of contractors, and offer expert advice from start to finish. Your Renovation Consultant can also go over cheap renovations to increase your home’s value so you get the best return on your investment.

How to stay on top of your renovation spending

Have a plan

Outline your budget from the start and know how much you’re willing to pour into various parts of your renovation. If you’re remodelling on a budget, you might choose to work with Refresh, where one of our local Renovation Consultants will advise you on the best areas to allocate your funds so you end up with a profitable home renovation.

Be very specific

Before any construction begins, it’s important that you know exactly what work is to be done so there are no costly surprises. A great way to get specific is to ask for a detailed estimate of your home renovation – a timeline that includes each piece of work that different trades are doing and how long each will take. Your Renovation Consultant is responsible for creating such schedules and timelines for complete transparency.

Minimise structural changes

The biggest money drains are structural changes like installing doors and windows, adding or removing walls, or altering the roofline. You may want to keep these types of changes to a minimum. A quick way to over capitalise on a house is to make a ton of structural changes that may not make a resounding impact on a home.

Plan for the unexpected 

Make sure you have a safety net in case the unexpected happens! It’s not always the case, but there are a few unforeseen circumstances like delays, deeper foundational damage to the home, or other issues that could arise and affect your renovation’s price tag. 

For example, this Manawatu home experienced an extended delay in council approval, but the Renovation Consultant kept the homeowner informed as they navigated a solution with the council. The resulting full-home renovation was completed in just four months, despite the wait time!

5 Factors that Influence Overcapitalisation 

1. Miscalculations can lead to overspending on your renovation. This is a common one, especially if you’re working solo without the guidance of a renovation professional. Such ‘miscalculations’ could encompass anything from misjudging labour costs to mistaking the amount of time that it takes to complete a specific project.
2. Scope creep happens when your renovation requires more work than you anticipated over the course of the entire project. For example, what you thought would be a simple bathroom spruce-up turns into a two-month endeavour. This is why it’s important to get specific about what exactly is required for your renovation and have your contractors stick to it.
3. Economic factors play a role in overcapitalisation as they can be unpredicted but equally as tough on the wallet. Take the recent timber shortage, for example. Many were left without certain materials or were paying a large premium for these items to get the job done.
4. Poor cost management is common, especially for DIYers. Because, let’s face it – unless you work in the industry, it’s challenging to become an expert on renovations and make the most cost-effective decisions for your project. Poor cost management often happens when an expensive unforeseen circumstance arises and homeowners don’t know the best ways to allocate their budget to accommodate.
5. Poor time management can easily happen too, especially if there’s miscommunication between trades. Steer clear of this issue by choosing to work with the right team. Plus, you may not have the time in your busy schedule to devote the many hours it takes to effectively manage a team of builders and navigate council approval. This is where there’s value in having a project manager like a Renovation Consultant on your side to ensure all of the trades are working together like a well-oiled machine. 

Ready to take the next step towards your home renovation?

Get in touch to book your free consultation now with our team of Renovation Consultants in Manawatu. We look forward to helping you plan your renovation!