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Australian’s love renovating — in the 2015/16 financial year, we spent a record $7.7 billion on updating our properties. Renovations are exciting, but they are also complex and a big financial investment.

It’s important to carefully plan and understand all the considerations around renovating. Here’s everything you need to consider when planning a renovation.

What are the benefits of renovating?

Make sure you have a solid reason to renovate, because the process can be financially and emotionally draining. However, with careful planning there are a number of great advantages to renovating your home:

  • Added value: A well-executed renovation can add up to 10% more value to your property. This can be leveraged especially when it comes time to sell.
  • Personalisation: You can make your home more comfortable, stylish and functional to suit your needs. Renovations can also be as big or as small as you want — you could put in a new kitchen or knock half your house down, it’s totally up to you.
  • Save on moving costs: By renovating instead of moving, you can save on stamp duties, agent and legal fees.
  • Upgrade your essentials: You can save on utilities by making your home more environmentally sustainable.

READ MORE: Here's 6 different renovation loans to consider

How much should you spend to renovate a house?

We've all heard renovation horror stories of budgets being blown-out and the process taking twice as long as it should. The truth is, every house is different and there are no hard and fast rules around approximately budgeting for your renovation costs.

The key here is planning well, doing your research on what products you’ll use, and sticking to that plan as strictly as possible. If you’re looking for a rough estimate, these figures may help guide your initial budgeting:

  • Bathroom: $10,000 - $35,000+
  • Kitchen: $10,000 - $45,000+
  • Living Room: $10,000 - $15,000+
  • Garden and deck: $2,000 - $10,000+
  • Master Bedroom: $2,000 - $35,000+

People often become so caught-up in budgeting for materials, labour and design (which make up around 80-90% of your costs) that they fail to plan for the hidden costs associated with renovating. It’s important to always include a 10-20% contingency budget to cover council fees and any alternative accommodation you may need.

Renovating mistakes and how to avoid them

There are a few big blunders people make again and again when renovating:

  • Ignoring market trends: You probably want to renovate your house in a style that suits your own tastes and creativity. However, this decision may come back to bite you down the track if you wish to sell. Try to find a balance between your tastes, and what the market trends are, otherwise you could severely decrease your potential resale value down the track.
  • Not seeking approval: You could face a hefty fine if you’re caught building an extension without getting approval first. This can also affect your ability to sell down the track. And if you’re interested in doing a DIY renovation, it's illegal to attempt your own plumbing and wiring – unless you happen to be a qualified professional.
  • Cutting corners: Choosing the cheapest builder, not addressing small fixable issues, and using cheaper materials may all be tempting when you’re trying to stick to your budget. However, more often than not, these decisions end up costing more in the long run when they need to be readdressed or repaired.
  • Renovating the wrong spaces: Renovating does not guarantee an increase in market value and it’s important to research what type of renovation brings value to your property type and location. For example, you may have renovated the bedroom whereas properties in your area draw greater value from outdoor spaces.

READ MORE: Are you being penalised for being loyal on your home loan?

Our top-5 easy renovations tips to boost value

Feel like you’re ready to renovate? Check out our top five tips to boost the value of your home before you get started.

Update your kitchen

Kitchens are usually one of the biggest selling points on a listed property, as they are equally valued for their functionality as well as their entertainment potential. If you’re looking to DIY, the biggest impact can come from some of the most commonly overlooked details.

New taps, knobs and handles can go a long way towards giving your kitchen a contemporary feel, and are all relatively inexpensive to install. Go one step further and fit new cabinetry doors that tie in well with your home’s overall colour scheme. Add a statement light fixture or a series of stylish pendant lights over your counter, and you’ll feel like you’ve got a whole new kitchen.

Create an outdoor living sanctuary

Make the most of our great Australian weather by investing in an outdoor living area that you’ll want to relax in all weekend. Whether it’s a sleek timber deck, fans, or down‐lighting in a gabled alfresco ceiling or an outdoor kitchen fit‐out, there are many ways you can transform your patio into your home’s best feature.

The best outdoor living areas find the right balance between letting nature in but keeping the elements out. Consider café blinds and outdoor heaters to offer some protection from extreme weather, and fill your space with shade-loving plants for a resort-like feel.

Spruce up your window treatments

Whether you’re adding sheers, pelmets, shutters or blinds, sleek window treatments will definitely add value while giving your home a polished look. If your windows are standard sizes, many blinds and curtains come ready-to-hang. Choose options that will also help with the heating and cooling, as windows are the biggest source of heat-loss and gain in a home.

Install quality lighting

Natural lighting is always best, but having good quality light fixtures are a close second. Every room in your house will gain a huge value boost from the addition of quality, contemporary light fixtures. Don’t forget, not all lighting has to come from the ceiling — consider wall sconces in living areas or strip lighting under cabinets for a cool touch.

Refresh your walls with a lick of paint

Is there anything a lick of paint can’t improve? Ask your local hardware store’s paint experts for help choosing colours that will enhance your home’s best assets. Take extra care to make sure your walls have been properly patched, sealed and prepared and you’ll be left with a perfect finish.

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