//FIVE MISTAKES TO AVOID WHEN RENOVATING YOUR HOME
FIVE MISTAKES TO AVOID WHEN RENOVATING YOUR HOME
South Africa’s interest rates are at record lows. According to a recent Reuters poll, 17 of 20 economists believe that Reserve Bank governor Lesetja Kganyago will keep the repo rate at 3.50% for the remainder of 2021, as Covid-19 continues to batter global economies. As a homeowner, there may be some good news here. If you have been putting off home renovations due to the expense involved, now may be the time to take out a loan or to extend your existing bond to finance those improvements – within reason, of course.
“It is important to renovate wisely to avoid overcapitalising your property and ensure you’re able to get a decent return on your investment when the time to sell comes along,” says Graeme Steen, Chief Operations Officer of Kandua.com, a local online marketplace for home services.
“Overcapitalising means that what you have spent on your home, including the purchase price and the cost of renovations, exceeds the return on investment when you decide to sell in the foreseeable future,” explains Steen.
He adds that the general rule of thumb is to spend no more than five to ten percent of the property’s total value on renovations, although this can differ depending on your area.
HOW TO AVOID OVERCAPITALISING
Steen shares five common mistakes homeowners make, resulting in them overcapitalising on their home improvements and how to avoid these.
Doing it yourself: This can be quite tempting: you have the tools, you’ve watched the YouTube video, what could go wrong? “A lot, actually!” says Steen. “It’s often more costeffective to use a qualified contractor from the start instead of having to pay someone extra to fix the DIY problems. While all the reality shows on television make renovating look easy and even fun, the results of a poorly executed renovation are far from impressive.”
Hiring the wrong contractor: By choosing a contractor without the proper qualifications and experience, you are putting your property and its residents at risk. “‘The benefit of using a platform like Kandua is that all service providers have photos of their work and confirmed reviews from previous customers,” says Steen.
Investing in the unnecessary: In addition to spending no more than five to ten percent of the property’s total value on renovations, owners need to research the average selling price of properties in the area.“Keep in mind: not every improvement or upgrade that you make is necessarily going to boost the value
of your home,” adds Steen.“Be strategic: upgraded kitchens and bathrooms add the most value. Renovations that make the house ‘greener’, increasing efficiency, reducing energy bills, and benefiting the environment, are becoming increasingly popular.” In saying this, Steen also advises, “if you are planning on staying in your home for 10-plus years, then that over-the-top deck you had installed may be worth it.You will have years and years of memories of entertaining on it, or in the kitchen you enlarged and spent every night cooking in”.
Being unrealistic about costs: This happens, time and time again. For example, some owners may focus only on the cost of their new tiles but neglect to include the cost of labour, grouting and the removal of existing flooring.“Make sure you get written, fully itemised quotes so you can see that there are no hidden extras,” advises Steen. “Also, make sure you have a contingency budget in place; if you remove tiles to reveal a hidden damp problem, you don’t want that to derail all your plans.”
Insurance: “The first thing you need to do is check that your builder has insurance and that it’s up to date. If you’re project managing the renovations or undertaking them yourself, you may need builders’ insurance on top of your regular cover.This is vital in case there is any property damage or anyone gets hurt. Once your renovation is complete, make sure you update your policy to reflect your home’s new value.You don’t want to find out the hard way that you don’t have the cover you need.”
Steen’s final word of advice is to support small businesses for your home renovations .“We’ ve analysed thousands of quotes and regularly speak to homeowners. Skilled, vetted independent professionals and small businesses offer great value, with prices around 30% lower than those of large companies. Plus, customers really enjoy the personalised service that they get.”
Kandua connects thousands of homeowners to vetted home services professionals every month – for everything from small repairs to large-scale renovations. For more information, visit kandua.com.