Nowadays, more people are seeking high-quality lifestyles, and living condition is an essential part of their requirements. For those who live in a house for a long time and wish to experience different living styles, or those who just purchased a second-hand house, renovating their dream house is a great choice.
The advantage of renovating a house is quite obvious, as it will enhance the living experience, and add value to the house itself. Also it will award you with greater returns if you decide to sell or rent out later on. But, is this the right time to renovate? Today let's have a look at the downsides of the renovation, and also what value our professional team at MoreMore Finance could bring to the table.
More Expenses
Renovating a home is not necessarily a smooth journey. The first thing that needs to consider is the budget. However, it might be hard to control the costs. For example, owners might want to redevelop sewer tunnels which could lead to more workload, or severe weather prolongs the construction period, and all these situations increase the budget invisibly. Meanwhile, during the months-long construction cycle, rent is also a heavy expense.
Roaring Cost
Raising construction cost makes restoration worse. Affected by the pandemic, there is a shortage of workers in the construction industry. Also, shortage in the supply chain has stimulated building material prices to rise and it will continue for a while. According to the latest statistics discovered by Australian Bureau of Statistics, the average price of building a house in February 2021 was $319,259, while in May 2022 the average price reached $413,436, with an increase of $94,177. And there's an increasing number of builders bankrupted in the last year or so, which also has a huge impact on the construction industry.
Potential Risk
When renovating a home, unexpected potential risks could bring significant financial losses too. Some policies, for example, if the homeowners fail to notify the insurance company about their renovation work, or if the home is vacant for longer than the required period when they move out, the building insurance might be invalidated. Also, homeowners should check the builder’s insurance in case they can not get a claim for unfinished or defective work. In addition, second-hand home needs a thorough inspection. If the house is contaminated with chemicals for instance, there is a risk that the entire building should be demolished at a higher cost.
Pressure From Newly Established Homes
In the last couple of years, due to the government’s Home Builder policy, and closed country borders, people paid more attention to property purchases. This will undoubtedly make it harder to find a suitable construction team to renovate as well.
Are you planning for any renovation at the moment? Here are what we can bring to the table as professional mortgage broker:
Cashflow lending from first-tier banks;
Cashout from refinancing, and you can use the cashout funds to renovate and upgrade your property;
If you need funding during Mid-construction, we can also provide you with professional lending advice.
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