Each fortnight I’m joining Sami and the gang on Radio Real Estate on Hot 91.1FM. Sami, Dan from Ray White, Rob from Adenbrook Homes and me, are taking a journey through The Renovator’s Survival Guide - picking out the very top tips.
In the second interview we talked about how to set a budget - unfortunately I forgot to record it! So here are the four questions to ask yourself - and we covered three of them. Avoiding over-capitalising comes next time.
- How much can I afford to spend? Do your sums on what you can borrow (or what you’ve got in the bank).
- What’s my ultimate goal and what are my accommodation needs? Think about how long you think you’d like to live in this home and then methodically assess your accommodation needs. Make a list of the needs and then the wants in basic terms.
- How much should I capitalise on the house? Do your homework on other similar houses in the area, and check with local agents for prices and features.
- Match up 1, 2, and 3 to check that it’s feasible. Do a reality check: are 2 and 3 in conflict or is number 3 more than number 1? Trade off requirements if this is the case - or say to hell with it, informed about what the gap is.
You do step four by making a little spreadsheet with the break up of the sizes of the rooms that are going to be retained and the typical sizes of the rooms you’re wanting to add. Then you calculate some ball-park costs based on rates for simply “making good” existing space and creating new space plus a typical ‘per unit’ price for some key areas - kitchen, bathrooms and deck.
Of course a critical factor in this is just what square metre prices you’re going to assume. For this I suggest the Archicentre cost guide, and a couple of different scenarios. Add it all up and see how close you are to both your budget and over-capitalising. This is the feasibility part. If you’re close, then great. If you want more than you can afford or should spend…then a masterplan may be the right approach, OR a total re-think.
Most people find it difficult to set a budget for their renovation. You might be able to afford $500,000 but does that mean it should be the budget? If you follow the steps above, you can get a quick back of the fag-pack assessment before you get in too deep into the design process and have emotions get in the way.
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