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  • How first home buyers can enjoy profits from cosmetic renovation

    How first home buyers can enjoy profits from cosmetic renovation

    There are plenty of ways to profit through property renovation as a first home buyer, but remember it all starts with buying your own home.

    Buying an unrenovated house on a good street in your selected suburb ought to be an opportunity to add value to the home, especially if you have spent at, or less than, the suburb's median house price.

    But be prepared for the anxiety, cost blow-outs, perhaps even tears.

    It is essential before exchanging contracts on any property purchase that you do the required due diligence, which in most cases means buying a building inspection report. It could save you plenty of heartache and misspent money.

    A standard building report will advise on the present condition of the property, along with its structural integrity.

    Most importantly it ought to point to any potential problems or prohibitions you'll be buying into. You will want to know and most likely avoid the likes of rising damp, rotten stump foundations and asbestos.

    So keep your eye out for properties without these issues, and with what agents call good bones - homes that have been neglected and simply need a smart cosmetic, non-structural renovation where you spend your money on things that can be seen straight off by the next buyer.

    Effective renovations at a low cost can start with sprucing up its neglected street front fence or facade. Maybe a splash of paint, a new street number and house name attached to the front wall. 

    Rendering can work, but will require the cost of product and professionals.

    Then the dated kitchen which can be transformed with new flooring, handles, replacement lights bench tops and splash back, but nothing too tricky.

    A modern glass shower screen replacing the shower curtain can do the trick of quick easy bathroom enhancement ahead of selling. 

    A bit of repainting does wonders, although it might take away your weekends.

    It is quite easy to get excited about your first renovation, so watch the budget as Scottie from The Block won't be there doling out the money.

    The experts suggest an effective cosmetic renovation should cost no more than 10% of the purchase price, so cost it out on a room by room basis. For the typical first time buyer than means no more than around $35,000 spent in those first few years of ownership. The figure should be pencilled in when you are calculating your envisaged total outgoings before you actually buy the property.

    Speak to Matthew Clark at RAMS Illawarra about your home loan needs.

     

    About the author

    • Wollongong - Matthew Clark

      Multi-award winning home loan expert, Matthew Clark has been in the mortgage industry for over a decade as Principal of RAMS Home Loan Centre Wollongong. Matthew was awarded the RAMS National Franchise of the Year 2014 for his tireless commitment to helping regular Aussies realise the great Australian dream of home ownership.

      In addition to Matthew’s hands-on experience in the industry, he also holds a Master’s in Commerce as well as a Diploma in Mortgage Lending.

      Contact your local RAMS Home Loan Centre about your home loan options.

       

      Matthew Clark
     

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  • Disclaimer:

    The information here is of a general nature only and is not intended to constitute financial or tax advice. You should consult your professional adviser, accountant or taxation expert for advice specific to your personal circumstances.