What else can you do while stuck at home - Covid has restricted people going away on holidays or even leaving their own LGA's unless it's essential, so many have used this time wisely to add-value to their homes.
Using Savings
We're used to seeing Aussies spend tens of thousands of dollars a year on holidays - those famous Europe or US trips, or the relaxing island holidays to Hawaii or Fiji. With international borders closed, this has restricted travelling overseas and as a result, we're saving more than ever before.
People are looking at ways to keep busy whilst stuck at home. This is the perfect time to invest some of these savings towards some upgrades to your home - perhaps a new outdoor deck, or that dream kitchen you've always wanted? Get ready to entertain as soon as these lockdowns end.
Using Equity
With the high surge in property prices this year, it's most likely your property has increased in value too. Did you know that you could potentially 'extract' the equity out of your home and use this towards renovations (or anything really).
What is equity? Home equity refers to the current market value of your home—which won’t necessarily be the price you purchased it for—minus the amount still owing on your home loan. To give you an example, say your home is valued at $800,000 and you still owe $300,000 on it, you’ll have $500,000 of equity.
This is one of the easiest ways to fund a renovation, as you don't have to save up anything to do this - it comes from the property market's activity in your area.
Improving Your Market & Suburb
With more than one in three home owners expected to renovate some part of their home this year, it's no surprise that demand and prices in the area will increase too. Renovations will generally improve the overall street appeal, with fresh and modern facade updates being carried out and new landscaping.
By increasing the value of your property, this may allow you to create further equity in your home which you could use to buy an investment property, buy a new car or anything else you wanted.
The Challenges!
As a result of this huge unexpected increase in renovations, we're seeing a shortage of some materials and an increase in prices. The lack of timber availability (in particular framing timber) is one of the biggest issues we're facing in the construction industry at the moment, so many builders have turned to steel framing instead.
Another major issue we're facing is trying to find tradespeople to carry out the work - some have waiting lists longer than 6 months to get started. There's only so much work they can take on plus the closure of construction sites hasn't helped the situation. Many are working around the clock (7 days a week) to try catch up with the backlog and get back on track.
So if you're thinking of renovating, make sure you plan well in advance to give your preferred tradespeople enough time to do the job. Start calling around to find out the expected lead times, and get quotes early-on.
If you're handy and can DIY any of the work yourself, then I would highly recommend this strategy. Not only will it allow you to get the job done quicker, but you can save thousands of dollars too. A win-win result!
I hope all of this info has been helpful and wish you all the best on your property journey. Please don't hesitate to get in touch if you have any questions.
Disclosure: The information contained in this blog is my personal opinion only and is not to be taken as financial advice. Please speak with your accountant or any other licensed professional for specific advice based on your own personal circumstances.
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