A home renovation can be a fantastic way to add value and make your space more comfortable and functional. However, even seemingly small projects can get expensive quickly.
To help you avoid a budget blowout, we’ve put together some practical, cost-cutting tips for saving money during your renovation project. From how to get the best quote to where you can do some of the work yourself, here are 8 ways to save money when building or renovating a house.
1. Be realistic about your budget from the beginning
A well-planned budget is the cornerstone of any good renovation. Start by defining the scope of your project and sticking to it. Knowing what you want—and, importantly, what you can afford—will prevent you from overspending and keep your renovation project on track.
How to plan a renovation budget
- Research and list out costs: Research the costs of materials, labour, and any permits you might need. Allocate funds to each aspect of the renovation.
- Account for your home’s value: A good rule of thumb is to spend no more than 10-15% of your home’s value on the kitchen, 5% on a bathroom renovation, and about 1-2% on a landscaping job.
- Avoid common pitfalls: Don’t forget to add a buffer of about 10-20% for unexpected expenses. Over-budgeting is better than under-budgeting.
By setting a clear budget from the outset, you’ll be able to manage your finances more effectively and avoid the stress of unexpected costs.
2. Research market trends and renovation costs
Keeping an eye on market trends is crucial when planning a renovation as the cost of materials and labour in Australia can vary widely, especially post-pandemic.
Why are renovations so expensive right now?
- Supply chain issues: From delays to price hikes on already expensive materials, the pandemic has created supply chain disruptions that many Australians are still feeling.
- The scope of work: The most expensive thing when renovating a house can often be big structural changes, like adding new rooms or moving original plumbing points. Consider whether these are necessary for your renovation.
- The type of materials needed: Kitchen renovations, for example, can sometimes be more affordable updates because many materials are sourced in Australia rather than overseas.
Being informed about the current market and choosing your projects wisely can help you maximise your long-term savings.
3. Prioritise renovations that add the most value
Focus on home improvements that will yield the biggest return on your investment (ROI). Some renovation projects, like a new kitchen or exterior improvements, can add more value to your home than others.
What adds the most value in a renovation?
- Exterior upgrades: In Australia, even small renovations like replacing siding, adding stone veneer, or updating windows can significantly boost curb appeal and resale value.
- Interior improvements: Remodelling a kitchen or bathroom or finding new ways to add space like an attic bedroom are proven ways to increase your home’s value. Just ensure these projects are within a reasonable budget relative to your home’s worth.
Spend your money where it counts most. Prioritising strategic building work over cosmetic fixes can have a big impact on your home’s value in the long run.
4. Get multiple quotes and negotiate
Never settle for the first quote you receive. From cheaper bathroom tiles to good quality insulation, shop around to find the best deals, and don’t be afraid to negotiate.
Tips for getting the best prices
- Obtain at least three quotes: Compare prices from multiple contractors or suppliers. This gives you leverage when negotiating for better rates.
- Consider fixed-term pricing: This can prevent unexpected costs from creeping in mid-project, though it might be slightly more expensive upfront.
Investing time in this process can lead to significant savings and keep you in control of your house renovation costs.
5. Choose the right builder
A good builder can make or break your renovation experience. Finding a reliable and affordable contractor is key to keeping your project on time and within budget.
How to find the right builder
- Ask for references and read reviews: Make sure to thoroughly vet any contractor you consider and read reviews from previous clients. Word-of-mouth recommendations from friends or family who have had good experiences are invaluable.
- Check credentials: Ensure the builder is properly certified and insured. This protects you from any liabilities.
A trustworthy builder will not only help you manage costs but also bring expert advice to your project.
6. Do it yourself (DIY) where possible
While you’ll likely need to pay professionals for a significant portion of your home renovation, finding DIY tasks can help you make a major saving.
Simple DIY tasks
- Painting and tiling: Applying a coat of new paint or tiling a backsplash are manageable tasks for most homeowners and can significantly reduce labour costs.
- Demolition work: You can save on labour by doing some of the demolition work yourself. Just make sure to take safety precautions and know what you’re doing.
- Source materials yourself: Many renovators on a tight budget find second-hand furniture or choosing floor stock and factory seconds can be a great way to save that doesn’t affect the overall aesthetic.
While DIY can be an easy renovating win, be realistic about your skills and know-how to avoid costly mistakes.
7. Stick to the plan
Changing your mind midway through a renovation can be extremely costly. The key is to keep to your original plan as much as possible to avoid additional expenses.
How to stick to your renovation budget
- Regularly review your budget: Set aside time weekly to review and update your budget based on actual expenditures.
- Define your style and needs upfront: Make decisions early on about the overall aesthetic of your renovation (e.g. materials, colours, and layouts) to avoid delays and costly changes during the project.
Being disciplined in sticking to the plan will help save you money and avoid unnecessary financial surprises.
8. Add a contingency buffer
No matter how carefully you plan, unexpected costs are almost inevitable in renovations. A 10-20% buffer ensures that you’re prepared for any curveballs that come your way.
How a Home Renovation Loan could help
- No collateral required: Our Home Renovation Loans are unsecured personal loans, meaning no security or collateral is needed for approval.
- Flexible options: Choose a loan amount and term that fits your needs, with repayment terms between 12 weeks and a year and loan amounts between $500 and $5,000.
- Fast online application & approval: At City Finance, we pride ourselves on our quick loan processing, often getting money to applicants on the same day they apply.
Personal loans can be a convenient way to pay for surprise expenses and keep your home renovation moving smoothly.
Renovating your home can be a rewarding experience, but it doesn’t have to break the bank. By setting a realistic budget, staying informed about market trends and prioritising high-value projects, you can keep your renovation costs in check and enjoy the results for years to come. Remember, thoughtful planning and smart decisions are key to a successful, cost-effective home renovation.
Would you like to explore financing options for your renovation? City Finance offers flexible Renovation Loans to customers across Australia. Contact us today to learn more!