Puzzle Finance Blog

Buyers need a level head

Calculating the costs of renovations you think are necessary can take some of the shine off house hunting, Stephanie Anderson writes

Something incredible happened at my kitchen table a few weeks ago - my little sister announced she is ready to buy a home.

Despite struggling with the fact that she is a mortgage-ready adult, not the chubby toddler in oversized glasses I still see her as, I agreed to help with the house hunt.

The search started off as fun, but soon flipping through property magazines and agent handouts descended into an odd version of Goldilocks with an investment fund. No house was just right - this bathroom was too dated, that kitchen too cramped or the laundry room took up far too much floor space. 

From bench tops to tiles, every property we looked at needed some form of renovating.

However, my sister isn't the only picky house hunter, according to figures from the Housing Industry of Australia.

HIA ACT says renovation costs in the capital totalled $461 million in the last calendar year, reasonably close to new housing costs at $513 million.

Luckily there are some simple measures house hunters can take to ensure their renovation costs stay down.

HIA ACT executive director Neil Evans says the most important thing to check before agreeing to anything is the structural integrity of the home.

''If that's wrong, you'll have major problems with every room in the house,'' he says.

Evans says the one person a potential buyer should bring to a house inspection is a building inspector.

''If there are any signs of minor cracks, I would then go up a step and get a structural engineer involved,'' he says.

If the home is structurally sound, Evans says the next step for house hunters is to inspect bathrooms, laundries and kitchens.

''It's the wet areas that are the killers,'' he says.

''When you have to renovate these, you can run into some big figures. It is a good idea to get a specialist in to get some quotes, so you can build that into the overall cost.''

Evans says it's also important to get people with the right expertise - someone with experience in building new homes won't be much help when looking at an older home in need of renovations.

''Get people that work and have done a lot of work in this area, because it's very specialised,'' he says.

While redoing a kitchen or bathroom can end up costing a substantial amount - some bathtubs alone cost thousands of dollars - Evans says the investment will add significant value to the home.

''The kitchens and bathrooms are good selling points,'' he says.

''And you will recoup that outlay.''

That's good news for my house-hunting sister - she has her eye on a tub that will set her back a good few weeks' wages.

Posted by Stephanie Anderson - Business Day The Age on 14th June, 2012 | Comments | Trackbacks

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