Top 11 Home Renovation Tips for Properties in Australia
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Thinking of renovating your home in Australia? It’s a good choice that can lead to a significant increase in the value of your property.
One thing that may be making it difficult to proceed as an Australian expat is that you might not know what to start with or which renovations will lead to the greatest impacts on your property’s price.
Familiarising yourself with the financial options you have and the most worthwhile investment renovations to carry out is important, and it can be difficult to keep up with each of these factors.
But don’t fret. If you’re in this position now, here are the top 11 home renovation tips for properties in Australia!
Why is Home Renovation a Good Idea in Australia?
Any little property enhancements can add to the value of a home. Expats can greatly enhance their home investment by renovating their Australian home, either to sell it for a greater profit or use the property as an investment property. It’s well worth renovating a home as an expat, and as the Australian property market is in such good shape, there’s no better time than now.
Get a free Australian mortgage assessment today.
Top 11 Home Renovation Tips for Properties in Australia
With the advantages in mind, let’s take a look at the top 11 home renovation tips for properties in Australia
1. Know Which Finance Options Are Available to Pay for Home Renovations
There are a few finance options available for Aussie expats to help you pay for home renovations. The first tip is to understand which main options you have, which include using offset account funds, using savings for renovations, selling shares to gain additional funds or home loan refinancing.
2. Recognise How Using Offset Accounts for Home Renovations Can Affect a Home Loan
One of the top 11 home renovation tips for properties in Australia is to consider how offset accounts can affect your home loan long term. An offset account enables you to link a transaction account to your expat home loan and pay the interest only on the difference between your offset account amount and your loan. You may choose this as a home reno finance option thanks to the reduced interest you’ll pay on a home loan.
For example, if your home loan is $500,000 and your accumulated savings are $50,000 the interest you’ll pay will be on the difference of these figures – which is $450,000.
However, you may have to pay greater amounts on your home loan if the difference between your offset and the home loan amount is reduced.
3. Understand How to Use Savings Efficiently for Home Renovations
Using savings is also a possible option to carry out home renovations. However, another of the top 11 home renovation tips for properties in Australia is that although you might use some savings for renovations, keeping an emergency fund available is crucial. Your emergency fund will ensure that you can cope with any surprise expenses without complications.
4. Recognise the Risks Involved With Selling Shares
Selling shares is a great option for financing home renovations, but keep in mind that market fluctuations can affect your gains and that capital gains can be affected by the sales of shares – leading to greater taxation amounts.
5. Understand How Refinancing Options Can Benefit You
Refinancing can be done in different ways if you’re looking to renovate your home. Your options include topping up your expat home loan or shopping around and comparing interest rates and conditions with other lenders.
6. Understand the Impact of Refinancing a Home Loan Financially
It’s important to know that there can be financial impacts linked with refinancing a home loan. For instance, you may be charged fees when refinancing home loans, which is one of our top 11 home renovation tips for properties in Australia, as is understanding that your repayments or loan length can increase. So, choosing a lender carefully is critical.
7. Consider That Particular Property Features Have Strong Appeal
When considering which are the top 11 home renovation tips for properties in Australia, it’s important to recognise that the age of the homebuyer can determine which features are the most appealing. Whereas Generation X generally prefers features such as a contemporary style kitchen, you’ll find that Generation Y values properties that have a swimming pool.
8. Consider Using a Line of Credit for Property Renovation
You have the option of using a line of credit type home loan. This type of home loan enables you to retrieve funds when they’re required, but remember that you will be charged an interest amount on your remaining balance that you owe on your account.
9. Consider a Construction Loan
Considering a construction loan is another of our top 11 home renovation tips for properties in Australia. If your goal is to carry out a big renovation, such as a rebuild, applying for an expat home loan for construction can help you get the finance you need.
10. Keep In Mind That Certain Conditions Will Apply for a Limited Time With a Construction Loan
You might find that construction loans are interest-only, but remember that this may not apply for the entire loan term. In other words, you may find that the loan will return to a principal and interest loan type at some point in the future.
11. Consider a Redraw Account
Redraw accounts make it easier to access funds that you have accumulated over time if you have paid extra sums on your home loan. If you’ve got a home loan of $950,000 and have a 30 year term, you may be expected to make monthly repayments of $5,000. In the event you’ve saved plenty more, you could contribute additional funds to your home loan and might be paying $6,500 each month.
In cases like these, you could access the additional contributions you’ve made via a redraw account and use them for your home renovations.
Renovate Your Home With the Right Finance
Getting the right financial options for home renovations as an Aussie expat is critical, and Odin Mortgage is the best for expat mortgages and finance options.
Ready to take the next step towards your dream home in Australia? Contact our team of expat home loan specialists today to discuss your needs and find what’s best for you. Get in touch with our specialists today!
Get a free Australian mortgage assessment today.
Frequently Asked Questions
Which property features require the greatest refinancing?
Considering the opinions of most homebuyers, there are a few key property features that will add a great value to the price of your property in Australia, but that also require greater refinancing. You may need larger funding sums to carry out expensive renovations such as kitchen, bathroom, landscaping and home layout renovations.
What is the best way to find the best options for home renovation refinancing?
As an expat property investor, choosing a broker like Odin Mortgage will help you find the best options for home renovation refinancing. Find the optimum financial advice for your position from the expert financial brokers at Odin Mortgage.
How are redraw and offset accounts different for renovation financing?
Whereas redraw accounts are best used when you need to retrieve finance for renovations from greater repayments towards your expat home loan, offset accounts are similar to a normal transaction account, but you may face greater interest or loan amounts when the offset balance decreases.
What should I be aware of when increasing my property’s value with renovation?
Always beware of overcapitalisation and applying for too much finance that may cause you to invest to the point of overcapitalisation. This may mean that you invest too much and don’t end up with the expected increases in value, so keep an eye on your budget and your refinancing options.
Are there any tax implications while performing home renovations?
If you are renovating one or more properties in Australia, the way you go about it can affect your tax obligations and entitlements. You can learn about all this in the ATO website.
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