Maintaining a home
How to plan for a home extension
27 October 2020
There’s plenty to think about when it comes to house extension planning, including:
- room or area
- reason for the extension
- how it’s going to look
- permits, and
- things you may want to consider if you have insurance.
According to domain.com.au, the average renovation in New South Wales costs between $75,000 and $150,000. Your budget will play a big part in determining whether your extension consists of something minor like some new decking, or a completely new kitchen and living area.
The big costs — like labour and materials — are obvious. But other costs can add up and can cause headaches if they’re not planned for. Think permits, fees, levies, heating and cooling, furnishings for the new area, and so on. You may also want a safety net in case expenses go beyond what you predicted (Murphy’s Law says they probably will!).
The saying ‘you have to spend money to make money’ might apply to you. For example, you may find that if you spend now to make the space energy efficient, you could increase the value of the home. It could also have the extra benefit of helping lower future power bills.
Check out our tips on how to renovate your home on a budget.
What is Rentvesting?
Rentvesting is a popular strategy in Australia when people are purchasing a property.
Often, they’ll purchase an investment property or multiple properties in rural or regional areas where typically prices are lower than in a CBD hub like Melbourne or Sydney.
People will then look to rent a property in the CBD, so they’ve got the benefits of a city lifestyle such as transport, eating out, and great schools for kids.
One other benefit is that you can use the income from the properties that you’ve purchased to even pay for your rent.
Why is Rentvesting popular?
A lot of the price increases that we’ve seen over the last decade have been for dwellings in the likes of Brisbane, Sydney and Melbourne. It means these properties are out of reach for a lot of people or a bit too much of a stretch.
Rentvesting means people can get a foot on the property ladder and purchase a property in lower-cost areas without giving up the benefits of a city lifestyle.
And often people want to purchase a property, but they can’t pick up their lives and move out to a regional area. So, by buying in these regional, rural, and lower cost areas and renting in the city, they get the best of both worlds.
What are the benefits of Rentvesting?
Some of the benefits of Rentvesting are you get to live where you want; you’re not restricted to where you can only afford.
And obviously investing in investment properties, you may get some tax benefits.
You also get the benefits of being a tenant. Those benefits might be if your washing machine or dishwasher breaks, you’re often not up for those bills.
What are some cons of Rentvesting?
Whilst being a tenant is great and you get some benefits, there’s also downsides to that. You may need to make the property you’re renting available for things like open for inspections. You may even need to vacate the property if the landlord decides to sell, sometimes two or three times, which can be really inconvenient.
As with any investing as well, you’ve got make sure you don’t get in too far and overextend yourself.
What to consider before Rentvesting
Some of the things to consider before Rentvesting is what’s important to you. If lifestyle is important, then Rentvesting may be for you. You may want to sacrifice and move further out, that’s up to you.
Suncorp Bank can help if you’d like to purchase an investment property. You can come into one of our stores and speak to one of our awesome team, our website Suncorp.com.au, or you can call us on 13 11 55 and we’ve got lots of people who can help you make that decision.
Room or area
The space you have to work with may determine how much you extend your house by.
Say you want a large outdoor kitchen and entertaining space, but you’ve only got a three by two metre garden. Could you build upwards? Or settle for something smaller? This is something to chat with your building designer or architect about.
You can leave it all to the pros, or work alongside them to create a beautiful design.
A tip you may often hear is to make your extension look like it belongs to your house. A postmodern, glossy black backroom may not suit your Federation home — or maybe it’s the unusual contrast you’re going for! We’ll leave that part to you.
While looks are one thing, liveability can also be as important. Building a nursery above your living area, where conversation is flowing, dishes are clattering, and the news is on, might not be the best idea, if of course, there is a better place in your space that allows for this. Large windows can make a space feel bigger, but something to think about if whether they let too much heat in during the summer months? Think about how you live and consider designing your home around that.
Reason for the extension
Do you want to add value to your home? You’re settled in and want to improve the space? Or, you need more room for your growing family?
The purpose behind your reno may guide how much you spend, what you do, and how you do it. Discuss this with your building designer so they can help you achieve your goals.
You’ll should dot the i's and cross the t’s before you begin work on your home extensions. Failing to get the right permits and approvals could result in a hefty fine.
You can check out these guides and checklists for your state or territory, which outline some rules for building and renovating.
Australian Capital Territory
New South Wales
Things you may want to consider if you have insurance
Depending on your policy, your building or home and contents insurance may not cover you for damage to the home or building as a result of the renovations. You should contact your insurer to find out about your particular policy. If you’re a Suncorp Insurance policy holder, make sure you contact us before you begin work.
- How to renovate your home on a budget
- Financing a renovation: What are your options
- Five ways to reimaging your home to create more space
Insurance is issued by AAI Limited ABN 48 005 297 807 trading as Suncorp Insurance. Consider the Product Disclosure Statement before making a decision about this insurance. This advice has been prepared without taking into account your particular objectives, financial situations or needs, so you should consider whether it is appropriate for you before acting on it.