G’day
How would I know if my grand plan for a renovation to a place is going to be over-capitalising the property?
I am looking at buying a one bedroom cottage, doing it up so that all the current floor space is living area and then I will add three bedrooms. How do I know if spending that sort of money is too much? The real estate agent wasn’t much help – too many variables he said!!
And does anyone know a rough estimate of what is normal $ per square for extensions. The rough quote that I have been given seems awful high. $10000 per square!!
Thanks in advance,
Gismo.G’day back,
To give you an Idea of what you’re paying to what you get. I’m paying a total of $170k for a brand new 4 bedroom, brick home with tiles in Brisbane. However if your house is 2 levels or in dificult terrain to build on then that can add to the cost. It’s probably more difficult to add on to an existing house than to simply start from scratch as well. My house is also off an existing plan by engineers who may have thought ahead with materials to save on cost.
To judge the cost/benefit ratio, simply look at the prices of houses in your investment’s area which have a similar structure (number of bedrooms, materials and condition) to the one you hope to build and that should give you a rough idea of how much value you’ll add onto it’s existing worth.
Just make a basic sketch and call in few local builders and ask them to estimate you a job. Ask them for advice on what construction.
Unless they will offer you a complete package – add at least 30% over the top of the price for unforseen circumstances.
Cheers,
I owuld think you have to look at other properties in the area – ones similar to what your’s would look like when finished. Then compare what these are selling for to what your total project will end up costing, ie valuation now plus extensions.
Terryw
Discover Home Loans
Parramatta
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