We’ve put together a few tips to help you save on your next home renovation
According to two recent studies, one by the Home Industry Association and Houzz, the average cost of a kitchen renovation ranges between $15,000-$24,000; a bathroom between $13,000-$19,000. These can all go over the top if you decide on renovating more than one room at a time, choose premium materials, or change your mind half-way through the process.
Consider partial, instead of full, renovations
With any major renovation or building project, you need a clear indication of how much you want to spend. The median or average is a good start, but you need to ascertain what you can afford. The average bathroom renovation costs $1,600 per square metre, for example. However, if you are only looking to update tiles and a shower, it can end up a lot cheaper than going for a full renovation where you need carpenters, plumbers, electricians, and other structural tradespeople to come in and rearrange entire rooms. These partial renovations give a house a new lease of life without costing too much.
Funding the project a cheaper way
According to Houzz, 80% of people draw on their savings to fund a home renovation. 20% they use a credit card and about 14% use their home equity (as well as their own savings.) Though money you’ve saved costs you nothing but time, using a credit card or home equity could end up costing much more in interest. It’s usually better to take out a home improvement or renovation loan.
“In most cases, taking out a separate renovation loan at a modest interest rate will beat putting it on the plastic – sometimes saving you a quarter in interest,” says Bill Tsouvalas, Managing Director at Savvy and home renovation finance expert. “Adding time and principal to your home loan will also increase your interest paid. Yes, a home loan interest rate is much lower than a personal loan. But the principal and loan term are higher, which all but guarantees paying more in interest over the long term.”
Set a clear budget – and don’t change your mind
When you have a clear “wish list” in mind for your renovation, set a clear budget before you apply for a personal loan. Changing your mind half-way through the renovation, or not accounting for complications by forgoing a building inspection, can cause budget overruns. According to Houzz, a quarter of all renovation projects blow their budget by at least 25% – if you’re investing $10,000 into a build, that’s an extra $2,500 you’ll have to come up with. If you don’t have savings to absorb it, you’ll have to put it on a credit card or borrow from elsewhere – which means even more interest payments.
Other cost-effective ways to ensure great reno results
There are a lot of creative ways you can renovate your place without it costing the earth! Other ways to update a kitchen or bathroom is to replace a central element such as the cupboards – pushing back cupboards to maximise space costs far less than throwing out the entire design. Another quick kitchen reno hack is replacing a benchtop and cabinet doors with similar materials or colours. In the bathroom, replacing a vanity or a shower block with a new and updated look using coloured or textured tiles can also make for a cheap and cheerful renovation. Other renovation tips for most rooms in your house can be giving it a new lick of paint; changing the curtains; removing old incandescent lights with power-efficient LED downlights; hanging new prints or pictures; introducing throw-rugs or cushions into the mix. You can create a whole new look at a fraction of the price.
