Look before you leap
Rookie renovators can seriously underestimate cost and paint themselves into a corner, writes Diana Clement
First-time renovators are everywhere. For some it will be once and never again. For others it will be the start of a profitable and satisfying journey up the property ladder. While renovations can bring you profit and/or the perfect home, they can also bring tears. Mark Trafford, a project manager who runs renovation company Maintain to Profit, says all too often renovators run out of cash mid renovation and are left sitting on half-finished homes. Sometimes for years. Trafford fields calls every week from people whose renovation has turned pear-shaped.
If you do want to renovate a home, make sure that you’re not biting off more than you can chew. It can be cheaper in Auckland to demolish and rebuild if the home is totally dilapidated, says Trafford.
In heritage areas that’s not always possible and a large, but ramshackle character home could cost up to $500,000 to bring up to the standard expected in a suburb such as Parnell.
Most people who have never renovated can seriously underestimate the cost, says Trafford. Many may have grander visions than what they can afford. That can come from watching too many TV programmes such as The Block, Ugly House to
Lovely House ,or The £1 Houses.
Trafford comes across people who assume a home extension to add living space and bedrooms will cost something like $50,000, whereas the reality can be more like $150,000 to $200,000.
Potential renovators can start with a renovations calculator or spreadsheet to get a rough ball-park figure of what it will cost.
These tools will help you break down costs and ensure you don’t leave too much out.
These calculations can give you an indication if the work is even feasible. Kiwis often do their renovations in a couple of stages thanks to the cost, so you might want to split the work into stage one and stage two.
You will need a full breakdown of the costs including building, plumbing, electrical, painting and other trades such as drain laying and roofing if necessary.
Owners can do a lot of the grunt work themselves, says Trafford. When it comes to the trades, however, you must by law use a licenced builder, drain layer, plumber or other tradesperson.
The Building Act allows homeowners to do simple work themselves such as replacing doors or building fences, but nothing structural.
Some owners try to wing it. But doing work without building or resource consent or DIY where the law requires you use a licenced practitioner really can come back to bite.
It’s not uncommon when you come to sell for the buyer’s solicitor to find out that the work has been done without proper consents.
Inevitably you’ll need a mortgage broker early in the process, says Trafford. “If it’s a sizeable project most people borrow money,” he says.
The sum of money the bank is willing to lend is another indication as to whether the project is affordable. “With that you can budget and scale the renovation accordingly.”
If you’re not sure where to start go to a builder or renovation company, says Trafford. They can tell you whether or not the renovations you plan needs an architect and council consent.
Both add time, and therefore money to the project. “Just to get concept plans for an architect can be at least three months at the moment,” says Trafford.
Be wary of issues such as asbestos, says Trafford. If there is asbestos on site it’s not just a matter of ripping it out. You’ll need to do an asbestos assessment. “Tradies won’t work on the site without that.”
Having no experience when it comes to renovations is a bit of a Catch 22. The best way to get the knowledge and experience needed is to jump in boots and all.
Do make sure, however, that you’ve done your numbers first, says Trafford. At least that way you will have good indication of the time and money needed.
Also ensure that you can get the trades people needed. Getting the project off the ground without them may be impossible. “The biggest challenge at the moment is getting tradies. All the new builds are sucking tradies out of the renovation sector,” says Trafford.
Problems lining up tradespeople as the renovation progresses can also be an issue.
“If the plumber turns up and the other trades aren’t ready you may not be able to get the plumber back for weeks.”