The renovation equation

MOST home owners think that renovating or extending their property will increase their net gain when they sell.

According to Bellarine Property managing director Christian Bartley, it is often cheaper to sell the property and buy another.

“Whether you renovate or extend, it is not always a cost-effective way to improve your standard of living or accommodate that new family member,” he said.

“The arithmetic isn’t as simple as original value plus cost of extensions equals final selling price. There are lots of factors to consider.”

He said that before going ahead ,home owners should estimate the average sales price being achieved for houses within a four-kilometre radius of their home.

“Be wary of going by the advertised price. Follow properties through and find out what they eventually sell for.”

Home owners should then be able to estimate the present reasonable selling price of their property.

“Make sure you are realistic. Compare your property carefully with others that have actually sold in the area.”

Mr Bartley said the last thing to do was to get written quotes from licensed, well-referenced local builders for the work you intend to carry out.

“Once you have done your homework you are in a position to put your equation together by estimating the reasonable selling price of your property and working out whether it is as high as the original (excluding renovations) value plus the cost of the renovations.”

According to Mr Bartley, another way of checking to see whether your sums are correct is to make sure the final (including renovations) estimate is no more than 15 per cent higher than the original (excluding renovations) estimate.

“Above all, make sure you don’t end up with the best house in the street or the value of the properties around you will negatively affect yours.

“In the long run, it is often easier to save yourself the hassles and the heartache and upgrade to another property instead of renovating.”

For further information, phone Christian Bartley on 0410 695 325, email [email protected] or head to bellarineproperty.com.au.