Home renovation

What are the benefits of home renovation?

• Increase property value for equity. A well-designed renovation can add significant value to your property. It's estimated that a major renovation can add up to 10% of the value of your home, particularly if you hold on to the property for at least 5 years. For example, if your property is valued at $500,000 and you spend $25,000 on your renovation, you potentially make over $50,000.
• Increase property to maximise sale price. If you plan on selling your property in the future, a carefully planned renovation can help boost the property sales price. Keep in mind that if you're renovating to sell, rather than renovating to live, you should take steps to ensure that any changes you make will appeal to a wide pool of potential buyers.
• Greater functionality. Whether it's a growing family, a home office or a retirement lifestyle, you may need to reconfigure the layout of your home, or create more space throughout. This could involve undertaking a major structural renovation to add new rooms, an additional bathroom or a guest room to leverage the available space.
• Avoid relocating. From real estate agent fees to stamp duty to conveyancing charges, the costs involved in selling and purchasing a new property can be exorbitant. Generally (and depending on the scale of the project), renovating or upgrading your existing home is a cheaper alternative.

How to plan a home renovation

Planning your home renovation can be overwhelming, especially if it's a big job. But thinking about it in stages and taking it step-by-step will help.

1. Set out your objectives. Have a really clear and realistic idea in your head of what you want your renovation to look like. Don't get started with half-decisions.
2. Figure out a timeline. If you're contemplating major renovation, you may want to consider planning the renovation in stages. For instance, you might want to upgrade your bathroom but then wait a couple of months before renovating your kitchen area.
3. Work out your budget. Ideally you'll have some savings to pull from to fund your renovation. This should give you a good benchmark for your budget. But if you need additional funds you should take a look at your options to find out how much you might be able to borrow.
4. Assess your property. Before you commence your renovation, arrange for a home inspection to identify if there are any structural problems. This will help determine any hazards or problems from the outset, rather than creating stress and hassles if you discover them halfway through the renovation. It's a good idea to get your property appraised by a conveyancer to determine its value as well as the projected value once the renovation is completed.
5. Find qualified tradespeople. If you're not planning to renovate your home yourself, you'll need to search for trustworthy, qualified tradespeople. Give them your plans and ask for a quote to compare services.
6. Get any required approvals. Depending on the extent of your renovations you may need to seek council approval.
7. Building permits. Your home renovation must meet basic requirements for health, safety and structural soundness as stipulated by the Building Code of Australia. The permit process also ensures that your plans are in accordance with local government requirements such as planning and environmental regulations.

How to work out your renovation budget

At the costing stage, you should break down your individual costs for each part of the renovation. For instance, if you're planning to tile a wet area, you should separate the costs for each separate task (e.g. waterproofing, tiles, labour) as this will help you keep tabs on your expenditure.

Once you've broken down your costs, you'll need to estimate your renovation expenses. Ensure that you source quotes from at least three different professionals for each major task to ensure that you get the best deal. Consider all the trade services you'll need including building inspectors, architects, engineers, builders and other specialised tradesmen such as plumbers and electricians.

It's crucial that you allow for hidden costs such as council fees and allow for a contingency buffer of at least 10-20% of your budget so you're prepared for any unexpected costs that may come up.

How to finance your renovation

There are various ways to cover the costs of a renovation. Here are some of the main finance options, but you can learn more about financing a home renovation in our detailed guide.

Home loan top-up: You can use the equity you've already built in your property to borrow from. Let's say you've got 30% equity in the home, so your remaining loan balance is the other 70%. Banks will usually lend up to 80%, which means you can borrow that extra 10%.

Top-up based on future value: With the plans you have for your renovation you can get a predicted future value. Using that you may be able to take it to your lender to borrow under the predicted LVR you'll have.

Refinance your home loan: You could refinance your existing home loan to borrow more money. Maybe even at a lower interest rate.

Line of credit home loan: Another option which uses the equity you have in your home, but the lender offers you a credit facility to use for any purpose. A line of credit doesn't automatically increase your home loan value, it increases as you spend the money.

Personal loans: If borrowing from your equity isn't an option, you could consider a personal loan.

Expert insight

"Once you know your budget and options, then you can engage professionals such as a draftsperson, builder, architect or tradesperson depending on your plans. A helpful tip is to also chat with your local real estate agent to get a view of what buyers are looking for in the area so you don't overcapitalise on your renovations."

Aaron Christie-David

Managing director and mortgage broker, Atelier Wealth

How to increase property value from a renovation

Choosing the property

A critical decision involved with your value-adding capabilities is associated with selecting the right property type for your needs. If you can find an unpolished gem at a bargain price in a great suburb, you're off to a great start. From there, it's all about maximising your returns and ensuring you get the best possible sale price for a renovated home in that location.

Small projects that may increase value

There are times when simple upgrades can yield greater profits than large-scale projects. These can include:

• Paint. Freshening up the paint in a room or on the exterior of a house is a cost-effective way of transforming the appearance of a property.
• Street appeal. No matter how good the interior renovation might be, it's the kerb appeal that can sway a buyer's decision. Clean the bricks with a pressure cleaner and paint any peeling paint on gutters or eaves. Replace broken or rusted gutters and downpipes and be sure they're painted freshly too. Shabby or unkempt gardens should be neatened up. Use plants and shrubs creatively to create an appearance of more space or to highlight features of the property.
• Floor coverings. Consider replacing faded, worn carpets or worn vinyl flooring with more modern options. It's easy to transform a room into a more appealing space by considering different floor covering options.

Medium renovation projects that may increase value

There are properties that can be improved enormously by completing a medium-sized project. This is especially true with older style homes that may not have the same amenities and living space as more modern homes. Some medium-sized projects that may improve property value include:

• Outdoor entertaining area. Adding a pergola or outdoor alfresco entertaining area can be a big drawcard for many buyers, especially if the outdoor space flows smoothly from the interior of the home. Consider changing old narrow doorways to larger bi-fold doors or sliding glass doors to integrate the inside living area with the outdoor entertaining area for maximum appeal. Find out how much it costs to renovate your backyard.
• Kitchen. Updating a kitchen can be helpful for improving property values but ensure that you plan a functional kitchen design that leverages the available space to avoid overcapitalising. Learn more about kitchen renovation costs in Australia.
• Bathroom. Update old tiles and fixtures and consider creating more storage space in your bathroom with modern amenities to create a luxurious feel. Read our guide for bathroom renovations here.
• Laundry. Many older style homes have enormous laundry areas that are under-utilised. Consider adding more storage space or installing a workbench in the laundry. If the room is large enough, you may be able to divide it and install a separate toilet or even a small bathroom, including a shower and vanity area. This may increase the appeal of the home if there is only one main bathroom in the floor plan.
• Living area. Some older homes feature floor plans that have a small living area and a separate dining room alongside it. You may be able to improve the floor plan and create an open-plan feel by knocking down walls and redesigning what you have to create more space.

Compare renovation services

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Name	Free quote	Service location	Process
Alpha Renovations		Yes	Sydney	1. Consultation 2. Initial Meeting 3. Product Selection 4. The Transformation Begins 5. Completion		loading Fetching your data...
Euro Prestige Renovation Services		Yes	Sydney	Process not indicated.		loading Fetching your data...
Indoz Homes		Yes	Perth	Design Plan Construct		loading Fetching your data...
P & L Knight Builders		Yes	Camden Cobbitty Macarthur region Southwest Sydney	We discuss your project dreams and requirements in detail. You will receive a written quote with a project design. On acceptance, plans are drawn up and submitted to council. We deliver home improvements that meet your every expectation.		loading Fetching your data...

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Frequently asked questions about home renovations

• How much does a home renovation cost?

  According to HomeAdvisor, a typical home renovation can cost anywhere between $19,485 and $88,368. The value of your own renovation will depend on whether you're only renovating a small part of the home or the entire property.

• Do I need council permission or permits?

  Whether or not you need council permission or permits depends on the work you're doing. Most internal work will not need approval, but external work might. It's best to check with your local council if you're not sure.

• What unexpected costs should I plan for in my home renovation?

  Even if you think you've planned and budgeted for your entire home renovation, there are almost always unexpected costs. This can include anything from a change of mind if something doesn't look right to finding out you have structural issues. It's important to get a surveyor and inspections done before you start the works to make sure you're as prepared as possible.

Written by

Marc Terrano

Publisher

Marc Terrano is a lead publisher and growth marketer at Finder. He has previously worked at Finder as a publisher for frequent flyer points and home loans, and as a writer, podcast host and content marketer. Marc has a Bachelor of Communications (Journalism) from the University of Technology Sydney. He’s passionate about creating honest and simple reviews and comparisons to help everyone get value for money. See full bio

Co-written by

Richard Whitten

Senior Money Editor

Richard Whitten is Finder’s Senior Money Editor, with over eight years of experience in home loans, property, credit cards and personal finance. His insights appear in top media outlets like Yahoo Finance, Money Magazine, and the Herald Sun, and he frequently offers expert commentary on television and radio, helping Australians navigate mortgages and property ownership. Richard started his career in education and textbook publishing in South Korea. He holds multiple industry certifications, including a Certificate IV in Mortgage Broking (RG 206) and Tier 1 and Tier 2 certifications (RG 146), as well as a Bachelor of Education from the University of Sydney and a Graduate Certificate in Communications from Deakin University. See full bio

Richard's expertise

Richard has written 651 Finder guides across topics including:

• Home loans
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