Cheap tricks to boost the value of your home

Man doing DIY

Tired houses are a yawn for their occupants and potential buyers when the time comes to sell. We look at some of the simpler ways you can add value and give your home a new lease on life, without turning yours upside down.

Lighten up

Natural light not only makes rooms brighter and appear larger, studies have shown it can make us feel calmer, happier and be more productive. What’s more, daylight is one of the best value additions you can make to your home. For around $800, a skylight or solar tube will light up a small, dim room or hall. Let light into larger spaces by adding a larger skylight, widening windows, replacing a solid door with a glass-paned one or, to really open things up, knocking down a wall. Tearing down walls is obviously the more extreme option but not necessarily as expensive as you might think. Firstly, if it’s not a load-bearing wall (get a licensed builder to check) you could do most of the hard yakka yourself. If the wall is brick or helping hold up your roof, get a professional to remove it. Taking down an average room wall costs around $2,000, but additional structural supports, such as beams, could double that. Even if you do have to fork out extra, you’ll be getting plenty of bang for your buck all day, every day. You’ll be glad you saw the light!

Clear that clutter

Clean, clear spaces in a home are highly sought – perhaps as an antidote for our busy, crowded schedules. Storage is king, but don’t rush to install built-in wardrobes or build a bigger garage. Get ruthless with your clutter, first. Go room to room, cupboard to cupboard, drawer to drawer deciding what should be ditched, donated or doted on. A great rule of thumb for clothes and household items is if you haven’t used it (or seen it) for two years, it’s time to toss it. If, after paring down, you still feel you need extra storage, consider organising the garage. Where once we strewed bikes, tools and boxes of Elton John LPs around our parked cars, garages are now sporting hooks and nooks to clear floor space and keep excess stuff in a most orderly fashion. Hangers and racks to get things off the ground are sold at hardware stores from $20 upwards. Or you can spend $1,000s with a garage fit-out specialist to create a whole new room with maximum storage (and still space for the car).

Lay of the land

No longer just a slab of lawn out front and back, the yard and garden have morphed into our outdoor rooms. If like many of us, you’re not blessed with an eye for design and a green thumb, it’s well worth paying a landscape designer up to $2,000 to scope the layout and specify what plants or structures should go where. You may even save considerably on the design fee – if you don’t mind being a bit of a guinea pig – by getting a referral for a final-year landscape student from a TAFE college. Look to remove trees or other foliage that block light, fix any broken fences or gates, cut back on expansive lawns that need mowing by paving or decking the area instead and create privacy with suitable trees or fencing.

Full frontal

Yes, first impressions really do count! Front doors have never made a grander statement, so consider what your current one is saying about you. If it’s humdrum, look at widening the entrance and fitting it with double doors or one of the new wider, chunkier front doors. Frame your front door with something that says “welcome”, be it a stylish plant in a pot, a tasteful sculpture or a neat path trimmed symmetrically with ground cover plants. You may find your money is best spent even further out front with a driveway make-over. For around $10,000 you can get an old concrete driveway smoothed and stencil-sprayed.

Your own canvas

Perhaps the cheapest and least intrusive way to transform an interior is to repaint. Dark rooms can be made bigger and brighter with the right, light hue, while bland homes can make a bold statement with a striking feature wall. The best thing about painting (or perhaps it’s the worst) is that most of us can tackle at least a wall or two, leaving us with just the cost of paint, rollers, drop-cloths and brushes. Those who don’t have the patience or time will pay up to about $8,000 for a professional to paint an average size home. Whether you go DIY or hire a pro, you should consider spending an hour and about $200 with a colour consultant. They will come to you and, with a designer’s eye, recommend palettes for your various rooms. They generally have preferred painters but, providing you pay for the colourist’s time, they usually don’t mind if you hire someone else or get stuck in yourself.

Touch base

Once you have decided on your action plan, touch base with your broker about how your mortgage is looking and what finance options are available for your proposed renovations. Be they big or small, your broker is more than happy to talk to you about all the options on the table.

10 reasons why borrowers need a mortgage broker

In an age when technology helps us research, shop and even – at times – think, we might wonder what other help we could possibly need when it’s time to buy our next home.

But, unless you have weeks of spare time and a brain that can store hundreds of home loans, plus their fees and conditions, and then match them to your situation, log off and set up a time to see a mortgage broker.

Here are 10 reasons why a mortgage broker is as valuable as ever:

  1. It makes financial sense. For the vast majority of home loans, your mortgage broker’s service is free. Lenders pay mortgage brokers a fee when they connect them to borrowers.
  2. Mortgage brokers work for you, not the lender. As keen as banks and credit unions might be to open their coffers, they have an equal interest (pardon the pun) in making as much money as possible from you over the life of your loan. A mortgage broker, on the other hand, will put your financial needs first and look for the loan that best suits your circumstances.
  3. Spoiled for choice. A mortgage broker has access to hundreds of loans from a long list of lenders – far more than you will encounter if you choose to go it alone. Mortgage brokers also have access to more boutique and wholesale lenders who don’t traditionally advertise to mum-and-dad property buyers, have some fantastic products and are eager for a slice of the mortgage market.
  4. Save your legs. Mortgage brokers will do the loan application leg work for you, not only making life easier but giving you a better chance of swift approval because your mortgage broker knows what’s required from the lender.
  5. After-hours service. Most mortgage brokers will come to you at a time that suits, an appealing selling point for busy professionals and families.
  6. Perfect match. Contrary to popular belief, banks generally like to deal with mortgage brokers because they put forward home buyers who meet all the lending criteria. It can often save higher-risk borrowers from being rejected and earning a red flag on their credit history.
  7. Avoid the pitfalls. Honeymoon offers, exit fees and fixed rates are just some of the terms that can confuse and confound. Your mortgage broker will take a long-term view and navigate through all the lenders’ fees, terms and conditions to make sure you’re not paying more than you should over the full life of your loan.
  8. Borrow within your means. You’re less likely to over-stretch and get yourself into financial difficulty down the track when you take out your loan through a mortgage broker. Where some lenders may allow you to borrow to capacity or offer a loan that’s not quite right for your situation, a mortgage broker will always recommend the loan that makes the most financial sense for you.
  9. Switching is simple. If switching lenders, either because you’re refinancing mid-loan or have bought and sold, your mortgage broker will manage the inquiries and all the paperwork. If buying a property, they will also often deal with your conveyancer or solicitor to keep things moving along.
  10. Get a health check on your existing home loan. At any time you request, a mortgage broker can scan the lending environment to make sure you’re still getting the best deal. And if your circumstances change, your mortgage broker can deal with your existing lender or find a new loan to meet your needs.

 

All in the family

The trend for adult children to remain in the family home for longer is putting a strain on their parents. But there are ways to make it work for everyone.

If you have a happy marriage and a comfortable home, studies indicate it’s more likely your children will delay moving out.

Well, they’re not silly, are they?

But, confirming the cruel irony of life, the same studies also show that having adult children remain at home can put a strain on parental relationships and finances. So you end up broke and unhappy, then they move out – right?

Well, there is another way. Handled correctly, the arrangement can benefit everyone, and help 20-somethings launch successfully into the world.

Today, about one in four, or 23 per cent of people aged 20- 34 live with their parents, up from about 19 per cent in the late 80s. Interestingly, significantly more men (27 per cent) than women (18 per cent) stay at home into adulthood.1

While some have never moved out, about half have left and returned, earning the tag ‘boomerang kids’. Some are shellshocked at the cost and responsibility of flying the nest, others want to save for a house deposit, and some return after a relationship breakdown.

No matter the reason, there are some basic rules to help minimise ‘boomerangs’ and reduce the impact on your sanity and hip pocket.

Teach your children to read, write and budget

Most would agree it’s never too early to teach your children the value of a dollar. Entertainer Toni Braxton raised eyebrows a couple of years ago when she revealed her primary school-aged children paid rent.

It was a nominal amount of their pocket money, but Braxton explained: “It’s so they can understand that when you get older and have to leave, you have to pay bills. It was a shock to me when I found out I had to pay bills, like, ‘What do you mean rent?’ So I thought I should instil that into my little boys.”

In today’s ‘swipe and go’ credit card age, young children are often unaware money is even changing hands, so it is more important than ever to take the time to explain financial transactions. And while pocket money can be divisive, if it comes with financial responsibility – to make your own decisions about spending/saving – it can be an important learning tool.

Have that hard conversation early

If your adult children decide to stay on after they have finished their study, or if they return to the family home after moving out, it is important to have a frank discussion. This can be hard but it will pay off, in the long run, to set ground rules early.

Experts agree adult children should contribute to the household costs, regardless of your financial situation. So it may be a good idea to research average rents in your suburb and discuss this with your children. Even if you only decide to charge a nominal rent, it is important they acknowledge real world costs. Also, let them see your electricity, rates, grocery and fuel bills and discuss how they will contribute.

If your child is studying or only working part-time, charging them the same amount of rent that’s expected of a full-time worker may not be reasonable or achievable. As a guide, it’s generally recommended to spend no more than 30 per cent of your gross monthly income (before tax) on rent.

If your child is saving to buy a car or a first home deposit, instead of paying the market rent rate, you might consider having them trade off some of the money for extra jobs around the house.

Setting up a direct deposit arrangement for rent payments can also save friction. And if you feel uncomfortable taking money from your children, and can afford the costs of having them under your roof, consider paying their ‘rent’ into a savings account and gifting it to them when they move out.

Accept that your children will struggle…and learn from it

Australian Parents Council Director Ian Dalton told The New Daily last year: “One of the issues we see quite a bit is that too many parents don’t want their kids to struggle.”

Dalton hits on a pivotal issue. Baby boomers recognise it is harder for their children in many ways – higher education now comes with fees, housing costs have soared and the job market is tight. No one likes to see their kids do it tough, but it is possible to ‘help’ your children too much, stunting their independence. Many well-meaning parents subsidise their children’s phones, cars and travel into adulthood.

Allowing your children to make financial mistakes (and learn to live within their means not yours) is part of allowing them to grow.

Seek help

Financial planners are now advising new parents to plan to support their children into their 20s. Nicknames such as KIPPERS (Kids In Parents Pockets Eroding Retirement Savings) and SLOPS (Singles Living Off Parents) indicate the problem.

This can put an additional financial burden on parents who should be saving for retirement. Financial advisors estimate having an adult child at home can cost anywhere from $10,000 – $24,000 a year depending how much parents subsidise extras, such as cars, phones, travel, entertainment and food.2

Some parents end up curtailing their own travel plans, retiring later or delaying downsizing so they can help their offspring. Discuss your situation with a financial planner. Charging your children as little as $150 a week adds up to nearly $8,000 a year. You could use this to supplement your retirement savings or to pay down your home loan or other debts.

Consider renovating your family home with a long term view

Talk to your mortgage broker about using the equity in your home to upgrade the family home. The extension you might like to build for your boomerang children could end up being your granny flat when it is time for you to pass the family home to the next generation and downsize your own living arrangements.

Try to remember there is an upside

This can be particularly true if your adult child returns with his/her own children in tow. You will in all likelihood be doing some extra babysitting, but embrace the bonds you are building. They could come in handy as you head into the territory where some extra help around your home could be just what you need.

1 Young Adults Then and Now, Australian Social Trends, 2013, Australian Bureau of Statistics.
2 Mother Can You Spare a Room?, Grind, Kristen, Wall Street Journal, May 3, 2013.

Interior design on a budget

Mention interior designers and most people think glossy magazines, luxe fit-outs and big bucks. But interior designers are not necessarily expensive, and the right advice from the right style guru could add some panache and pizzazz to your décor for fewer dollars than you think. It’s as much about knowing who to use as it is about knowing how to use and when to use an interior designer.

When building

An interior designer can help inject your personal style and personality into your new home. If building a custom or architect-designed home, an interior designer will help connect your carefully crafted exterior with what’s within. Your architect and designer may even work hand in hand to ensure there’s continuity throughout. It’s about creating spaces you enjoy but also those that function efficiently.

Inviting a designer to work on a new home is like presenting a painter with a blank canvas. But don’t wait until your house is complete to introduce your designer. Bring them into the project while it’s under construction to help choose materials for critical design features, such as the kitchen, bathrooms and floors.

Even if building a project home, with limited choices of features and materials, you can make the most of a designer to stamp your own style. Find a designer who is willing to work for just a few hours at an agreed rate to provide advice on colour, art choices and soft furnishings.

Avoid incorporating too many fads into permanent fittings and fixtures. Tastes, trends and technology change so limit bold statements to furniture and décor you can switch out easily.

When renovating

Before you knock down walls or put up new ones, invest in a visit from an interior designer for sound advice and fresh thinking. A good designer will listen to your brief but overlay it with their experience and insights, which means they can see around the corners you can’t, helping you maximise design opportunities and avoid costly mistakes. Your designer can also project manage some aspects of the renovation for you, which is handy if you work full-time. Costs vary but add at least 10 per cent to your renovation budget for this service.

Show your designer any special items you wish to display, such as a painting or a collection, to ensure your remodel will accommodate them. Interior designers focus on the big picture but also bring an eye for detail to ensure your renovation reflects you, your interests and your lifestyle.

One of the biggest benefits of using an interior designer is their ability to act as a renovation referee, ensuring the project caters to both his and her needs and encouraging compromise where required.

When selling

This is when designer tastes can really pay off. A well-staged home can help seal the deal sooner and potentially fetch bigger bucks than if you styled it yourself.

Staging can cost thousands, especially if you hire furniture and art (which can be worth it), but a designer can also help you show your house in its best light on a budget.

One of the first priorities is to declutter. A designer is likely to be more ruthless and less emotional about what to display and will know how to make rooms appear as light and bright as possible.

Ask your designer to advise on paint, window dressings and soft furnishings, all of which can be easy and inexpensive to change before your house goes on the market.


How to work on a budget with an interior designer

  • Find a designer who is willing to work for an hourly rate and be specific about how you wish to use their time. You might, for example, ask them to come up with design ideas on the proviso you put the effort into bringing them to life.
  • Share your decorating budget with the designer so they select furnishings, fixtures and fabrics you can afford.
  • Ask your designer to develop a mood board with colours and materials so you can create the look yourself.
  • If your budget is super skinny, engage a designer just to scope your colours. You can get expert advice on the right paint palette for as little as $150 an hour.
  • Find images in magazines and online to explain what you do and don’t like.

How to avoid property pitfalls

If you have seen the movie Money Pit, in which Tom Hanks and Shelley Long play a hapless couple whose home renovations plummet from bad to disastrous with every swing of the hammer, it’s easy to see why buyers should be beware.

But it’s not just hidden and costly repairs that can snag home owners and investors. we lift the lid on other potential pitfalls.

Title check

It’s worth enlisting a professional conveyancer to undertake a title search when buying a property. The title search will reveal any easements (shared access) or covenants (restrictions). Easements could include the right for pipes to be buried on your land, while covenants can specify building materials or restrict building height. Easements and covenants are not necessarily deal breakers, but you should be aware so you can plan around them, especially if renovating or rebuilding.

Off the plan

There are pros and cons to purchasing off the plan. While many punters have notched up solid returns in the short and long term, it remains one of the more speculative ways to buy, especially in markets with high volumes of new apartments in the pipeline.

If buying off the plan, make sure you do your homework on the local market and have sufficient financial back-up to withstand any dip in value on your purchase price once built and any shortcomings in the projected rental return.

Weather resistant

Avoid being a fair-weather buyer who collects the keys having only seen the property on sunshiny days. Rain can quickly transform a poorly-drained property from bliss to bog. If you don’t get to inspect the property in wet weather, be bold and ask neighbours how the property holds up in a downpour. You should also always check council flood maps to see if the property is at risk of flash, creek or river flooding. Some councils do a better job than others of collecting and sharing flood data. If council flood maps are not publicly available, a council planner might be able to give you historical information about your property.

A professional building inspection can also help detect any drainage issues.

Know your neighbours

It’s hard to know who lives over the fence or down the hall until you move in, but bad neighbours (at the risk of another movie reference) can make or break your dream home.

At the risk of snooping before you move in, try and get a read on who else lives in the street or complex. If flanked by households of renting students, you could be in for some late-night parties, which may be tolerable if a midnight party-goer yourself, but less welcome if you have a young family.

Close inspection

Be sure to invest during the cooling off period in a pre-purchase pest and building inspection by a licensed and insured professional.

Professional inspections can unearth evidence of pests – including termites and rodents – and structural issues such as dry rot, rising damp, roof leaks, asbestos and poor drainage.

There is no cooling off period at auctions, so book an inspection and read the report well ahead of auction day.

Body corporates

If buying an apartment, villa or townhouse, do your homework on the body corporate – the fees for each quarter and how the body corporate operates. A well-run body corporate can help avoid surprise costs for unforeseen repairs and prevent disputes over common areas.

Check there is an adequate sinking fund to cover repairs and refurbishments and sufficient strata insurance to cover total replacement of the apartment building or complex in the event of a catastrophic fire or natural disaster.

You should also request copies of at least the previous three body corporate meetings to get a read on any potential issues.

Beyond your means

Be careful not to commit beyond your finances. Interest rates are at record lows and will inevitably rise again. Make sure you leave a buffer in your budget to manage any increases or change in personal circumstances, even if your lender lets you borrow more initially.

Ideally, your mortgage repayments should be no more than 25 per cent of your total household net income. Talk to your broker to assess your affordability in line with your personal circumstances.

Why use an AFG Broker?

Having an AFG broker negotiate finance on your behalf if the smart way to go as they look to save you time, stress, and money.

When should I see a broker and what can I expect?
You can see an AFG broker at any stage in your financial journey. You might still be saving for your first home, wishing to use the equity in your current one, or wondering if you’re getting the right possible deal with your existing lender.

You can make an obligation-free appointment with an AFG broker at a time and place that suits you.

Your broker will ask about your financial circumstances and objectives to find out what’s important to you in a home loan. For example, flexibility might be important because you plan to start a family or you may want ready access to equity for a rental property or renovations. Whatever your plans, your broker will research the market and recommend the right home loan to suit your needs. An AFG broker always looks for the right loan for you, not the lender.

Once you have agreed on a loan, your broker will manage the application and make sure everything is in order for the approval process.

Renovate Right

It’s been more than 25 years since Tom Hanks and Shelley Long showed us the calamitous side of renovating gone wrong in the comedy movie, The Money Pit, but the warnings ring loud and clear today. With a sluggish property market, many homeowners are opting to renovate rather than relocate. Before you hit the hardware store and strap on the tool belt, here are our top tips to renovate your way to reward, instead of ruin.

1. Renovate or rejuvenate?
You don’t have to tear down walls or add a new storey to add value to your home. If you need extra space, you will probably have to renovate. But there are plenty of ways to add value without making drastic structural changes: paint a new colour scheme inside and out; clean up and replant an overgrown garden; replace floor coverings or sand and revarnish existing timber floors; spruce up old windows with some modern shutters; or create some extra storage with built-in wardrobes.

2. Know what you can and can’t do yourself.
Not the DIY type? Face defeat early and call in experts to tackle the job. It may be difficult to part with money for something you feel you can do yourself, but if you botch the job, you will pay more in the long run. There are some jobs even skilled DIYers should not tackle for safety reasons, including electrical work, asbestos removal and roofing.

3. Target your market.
If you are buying a property specifically to renovate for profit or sprucing up your existing home for sale, consider the likely buyers for the neighbourhood. Remember you’re not renovating for your own lifestyle and tastes, so keep colour palettes neutral and avoid fittings that are overly artistic or unusual.

4. Take a peek at the competition.
Visit some of the fully renovated houses in your area that are up for sale to see what the market is prepared to pay and what buyers are looking for. It will give you a good handle on which features help differentiate one property over another and current values.

5. Don’t overcapitalise.
It remains the golden rule of renovating and is particularly poignant in the current market. Cost every aspect of your project and be realistic about the value it will add, especially if you are planning on staying in the property for only a couple of years or less. If you plan on living there for more than five years, you have a little more leeway to recoup the value of your renovation at sale time. However, it’s still wise to keep at least a 20% margin between what you spend and the current value in case you have to sell sooner than expected.

6. Don’t start what you can’t finish.
If you don’t have the money to undertake your project, don’t start. Some renovators kick off their project with an aim to saving up along the way. If your savings fall short you may be left with an unsightly, unfinished project, which will curtail your capacity to sell if needed. Chances are you will also lose interest in taking on future projects, so make sure you have all the money you need upfront.