Owning a home

Getting ready to renovate

4 min read

Aside from actually buying a house, renovating it is one of the more stressful housing-related activities you can undertake.

Thankfully, if it’s done right it’ll also add value and provide your home with a new lease of life. But where exactly do you start?

It doesn’t matter how large or small your planned renovation job is; you’re going to need a solid plan. The first thing to do is figure out if you can afford your grand design — and that means budgeting.

Get budgeting

A great resource for budgeting is sorted.org.nz — an independent financial guide containing all sorts of great financial advice. In this case, we want to use their budgeting tools to make sure your renovations don’t blow the budget. Use the Money Planner to plug in all your financial details (income, debt, savings, regular expenses and so on), this’ll make it much easier to see where you stand.

From here, determine how long it’ll take to save up the money, or how much to borrow. If borrowing is how you plan to fund your renovation there are plenty of options available, including topping up your home loan. We have more information on these on our website and we have experts available to talk you through it and how it applies to your individual situation.

The most important thing when creating a budget for your renovations is that you’re realistic about what you can afford. Don’t underestimate your regular expenses and, if you can, include a buffer of ‘just in case’ money for unforeseen costs.

Avoid over-capitalising

At this point, it’s important to weigh up whether you’re over-capitalising. Unless you plan on living in the house forever, there comes a point when it doesn’t make financial sense to pump too much money into the renovations if it’s money you likely won’t get back when the time comes to sell. A professional valuation of your home will give you an idea of how much it is worth.

If you think you might need to borrow money for your renovations, check with your bank first about their valuation requirements. This will give you a good starting point when it comes to deciding how much you want to spend. Ultimately renovations should increase the value of the home by more than you spend.

Upgrading bathrooms and kitchens are popular places to start, and renovations that increase the efficiency of the home (like decreasing energy or water bills) will be attractive points for a future buyer. Anything that could limit what a future buyer might want to do with the property should be weighed up carefully before you proceed.

Have a plan

Your plan needs to take into account many things, including costs, the length of time your home is going to be a construction site, if you think you’ll need to hire a designer, an architect, an engineer or all of the above.

When it comes to hiring, don’t just go by price. Consider a range of factors including experience working on similar jobs and the reputation of the company. The Consumer Build website has a section dedicated to renovations, which is a gold mine of information including some sound advice on finding such professionals.

Rules and regulations

Whether it’s a pro job or DIY, you’ll need to ensure anything you do is compliant, and this means talking to the local council to find out what, if any, consents are required to ensure the work is legal and safe. Again, the Consumer Build website

Come and see us

When it comes to renovating your home, you can’t be too prepared. The more surprises you eliminate in advance, the smoother things will be during construction and the less likely you are to suffer a budget blow out.

And don’t forget to come in and see us if you’re in need of some advice re options to fund the renovations you are planning. Find out more information about how you could top-up your home loan to pay for your renovation here.

This article is intended as a general discussion only. BNZ recommends the recipient get independent advice. The views expressed are the writer’s own and do not necessarily represent those of BNZ or its related entities.