How to avoid over-capitalising with your reno

From the Resene decorating blog

Cost blowouts and overcapitalising are two of the biggest dangers when it comes to planning and successfully executing your home renovation.

Whether you are renovating ahead of a planned sale of your property, or simply wanting to protect the equity you have invested in your home, keeping a cap on costs is important – and not that difficult if you do a bit of research and planning, and get good advice.

A renovated aqua and white bathroom

Bathrooms are popular renovation projects and can add value to your home. Keep your costs under control by reviving surfaces with bold paint choices.

Top wall painted in Resene Elderflower with tongue-and-groove panelling in Resene Yes Please. Floor finished in Resene Colorwood Mid Greywash, wooden bath mat and inside of the tray table in Resene Mozart and vases in Resene Meditation and Resene Kandinsky. Bath, bath filler and vanity from Plumbing World. Project by Megan Harrison-Turner, image by Bryce Carleton.

Add a burst of vibrant colour to your front door

To improve the street presence of your home without overcapitalising, just add a burst of vibrant colour to the front door.

This front door is painted in Resene Turbo surrounded by trim in Resene Black White and weatherboards in Resene Triple Concrete. Bench in Resene Tuna, pots in Resene Nocturnal and Resene Silver Chalice and house number in Resene Nocturnal. Door from Corinthian Doors, light from Lighting Direct. Project by Vanessa Nouwens, image by Bryce Carleton.

What is over-capitalisation?

Over-capitalisation means spending more on improvements to your property that you won’t recover in its value. For example, someone might spend $100,000 on a kitchen renovation but it only adds $50,000 to their property value so they have effectively lost $50,000.

How much of an issue this is for your property will really depend on how soon you want to sell your home. If you’re not intending to sell for several years, your property may recoup the additional value, but it is always good to at least know the numbers before you embark on your renovation projects.

Your local council keeps records of the official capital valuation (CV) of your property but that may be different from what the market is willing to pay for your property. Many local real estate agents will offer free, no-obligation property appraisals and will know what recent market activity has been in your area for properties similar to yours.

They should also have a good idea of what value your renovation will add to your property. Different types of renovation are often more valuable to buyers; kitchens and bathrooms, for example, tend to add more value than putting in a pool (which can actually reduce the value of a property) or extending the size of a bedroom. They can also often cost a lot more.

A good rule of thumb for renovating, particularly if you want to sell in the near future, is to keep your project costs to 10% of your property value.

Revive a foyer with faux painted tiles

Adding faux painted tiles or stone flooring is a cost-effective way to revive rooms like foyers, kitchens and bathrooms.

‘Tiled’ floor painted in Resene Midwinter Mist with ‘grout’ painted in Resene Stack. Back wall painted in Resene Arrowroot with texture in Resene FX Paint Effects Medium mixed with Resene Half Alabaster, window trim and skirting in Resene Half Alabaster, left wall, coat rack, table and lidded dish in Resene Explorer, lamp in Resene Stack with stripes in Resene French Grey, small vase in Resene French Grey and the picture frame in Resene Arrowroot. Project by Kate Alexander, image by Bryce Carleton.

Repainting kitchen cabinets

Repainting kitchen cabinets adds immediate new life to a tired kitchen without the need for a full, costly renovation and you can easily repaint them again later.

Cabinets painted in Resene Spindle with painted shapes in Resene New York Pink, Resene Twine, Resene Smashing and Resene Half Resolution Blue. Walls in Resene Triple Merino, floor in Resene Colorwood Mid Greywash and table in Resene Half Sea Fog with chairs in Resene Resolution Blue, Resene Twine and Resene Anglaise. Vase from Shut the Front Door, artwork from endemicworld, tea towel from Father Rabbit, blue placemats from Country Road, dishrack (painted in Resene Spindle) from Citta, serving board (painted in Resene Twine), bowls and plates from Country Road, grey cups from Freedom. Project by Kate Alexander, image by Bryce Carleton.

Managing your costs

Pick your real estate agent’s brain about how you can get the most for your renovation budget. They may say the kitchen is fine as is, or could just be spruced up with fresh paint on the cupboards or walls.

Instead of a new skylight in the ceiling, you might be better off retiling the bathroom or trying to add on an ensuite.

Other good places to spend pre-sale renovation money are fixing a bad layout or an earlier badly executed renovation and fixing anything that is broken, dirty, leaking or draughty.

Have a plan

Knowing exactly what you are trying to achieve with your renovation and why helps avoid expensive last-minute changes, and helps ensure you end up with a finished space that is functional and meets your needs while you’re living in it, yet will add value for potential buyers in the future.

Some good questions to ask yourself before embarking on a renovation so you have a renovation roadmap to follow are:

How much do you have to spend? Make sure to include how much you will have to spend on administrative costs like consents and budget for a 25% ‘slush fund’ to cover unexpected overruns.
Are you renovating for yourself or a potential buyer?
What are your needs now and in the near future? Is your family growing, shrinking or staying the same size? Do your growing children have different needs than when they were younger? Do you need to incorporate a space to work from home?
What do you want to include in your home? Does it meet your budget and fit in with your needs?

DIY where you can

Some aspects of your renovation will have to be completed by a certified professional, particularly any structural building and electrical work, but there are jobs you can take on yourself to keep costs down.

Painting and wallpapering walls, floors and ceilings yourself is relatively simple and cost-effective, as is sanding and staining a deck, fences, pergolas and outdoor furniture.

The trick, if you haven’t done a lot of home renovation before, is to get good advice from experts like the team at your local Resene ColorShop. Practice technique on spare bits of wood or plasterboard before you commit. There’s nothing more annoying than trying to cut the cost of your project by doing things yourself, only to have to get them done again.

If you’re unsure, get a full breakdown of costs of DIY, and compare it to a tradesperson’s quote, factoring in the risk of you making a mistake.

Quick makeover ideas

If you come to the realisation that your big-picture renovation will result in over-capitalising, think about the projects you can do that can transform spaces enough to add value without breaking the bank.

Focus on street appeal. Paint your front door in an on-trend bold shade like Resene Jalapeno or Resene Clockwork Orange. Add the same colour to your letterbox.
If you’re preparing for sale, consider opting for a neutral colour palette throughout the house so buyers can imagine their own colour schemes. In cool rooms try warm off-white neutrals like Resene Cararra or Resene Half Tea. Lighten up darker rooms with brighter whites like Resene Double Alabaster or Resene Quarter Black White.
Refresh tired kitchen or bathroom tiles by painting over the top. Clean them first, scrubbing any grout marks then wipe clean. Apply Resene Waterborne Smooth Surface Sealer, which will help your topcoats grip onto the smooth surface, then paint. Use Resene Walk-on as your topcoat for floor tiles or Resene SpaceCote Low Sheen or Resene Lustacryl semi-gloss as your topcoat for wall tiles. Top tip; Don’t paint tiled splashbacks behind stove tops as the heat may cause paint to bubble and flake. Instead. try a glass splashback back painted in your choice of Resene colour.
Most kitchen cabinet surfaces can be easily repainted to give your kitchen a fresh look without a full makeover. Add new handles for a more modern look.
If you have concrete or plain wood floors, give them a new lease of life by painting a faux tile design on the surface using stencils or masking tape. Top tip: For painted floors opt for a hard-wearing paint like Resene Walk-on finished with Resene Concrete Wax.
Revive outdoor areas with painted pavers using Resene Non-Skid Deck & Path, designed to reduce the hazard of slipping. Or use Resene Walk-on paving paint for a less textured finish – and add Resene SRG Grit for extra slip resistance.

A reno project can be a major undertaking. Where you can, break it down into smaller manageable stages so that you can comfortably live in your home as the reno progresses.