Frequently Asked Questions About Extensions or Refurbishments

How much will it cost?

This is the question I get asked most.  It does cost a lot of money, pay good money and get good work done.  The bank will recognise the value of money spent with a builder and improve your properties valuation by the amount you have spent dollar for dollar.  Of course this is a snap shot view of the financial situation at the completion of the work.  Where you will make real gains is the capital growth on an improved property, it’s attractiveness or renewed nature for the next 5-10 years.  In spending the money you must be able to show that you are adding to, or upgrading the home.  It is foolish to think you can improve the value moving the kitchen from one end of the house to the other, or putting in a larger kitchen to the same area that now impedes on the other living areas around it.  Cheap work means cheap results and the real value of the home is compromised in an unprofessional way.  When it comes to resale people who know nothing about building will quickly see the work that is not done right.  It’s ironic, but you get what you pay for, as I said at the top pay good money and get good work done. 

What if we over capitalise?

Additional bedrooms, bathrooms and living spaces are the quickest ways of adding real value to your property.  It costs money, so pay the money and get the work done properly.  My experience has proved whatever money you put into your home, you will get back much more over time, but this is conditional, never renovate for resale, never allow a friend or relative to do construction work on your home.  They may end up causing you a major liability with no come back on them.  Insurance does not cover the resultant damage caused by rodents or insects like a termite infestation.  Only use a licensed builder who is experienced with work to existing property.  A home has inherent moisture and termite barriers that are built into the original design to protect the home.  It is very easy to compromise these barriers.  Never build in a patio, carport or garage unless a licensed builder is prepared to do that for you.

What things will improve my home?

Increase your living space and integrate the outdoors with indoors the Queensland way.  Add more facilities.  Make a feature of any unique attributes of your property.  Improve climatic benefits, that will make your home warmer in winter and cooler in summer.  A granny flat, retreat or media room are what people look for.  You should always keep resale in the back of your mind.

What are the advantages of improving an existing property?

The cost of new land is ridiculous! Why move when you can improve?
Significant savings can be made off the cost of renovating, compared to the costs of changing your property.
You can continue to live at the same address and improve the appeal of your home.
Add new living spaces like bedrooms or utilities.
Correct existing design faults. Most new homes ever built have never made aspect a priority. Economy drives this market but now you have made it your home.
You can improve the capital value of your property by adding on or upgrading what you have.
Improve capital growth on your only tax free asset.
Every home needs a total refurbishment every 30 years.

What role does having a pre-determined budget play?

It allows you to develop a design brief that will coincide with your budget.

We are not sure where to begin?

I have provided a brief outline of where to begin.  See my  "7 Steps to Renovating".

Do I need an architect?

If you intend to spend a large amount of money, or you don't have the confidence to work directly with a builder, I would suggest perhaps!  But for the most part a reputable licensed builder and building designer can do the job for you.

What defines major work to an existing home?

In contractual terms the BSA have determined a benchmark of $20,000, work to a residential property over this value is considered major work.

What extent will I be involved during the building contract?

On an existing property, where you are living during the construction period, contact is invariably on a daily basis.

During a contract, what are unforeseen circumstances?

When working on an existing property there are always items that need to be repaired or altered that were not foreseeable before the work was commenced.  The existing services often hidden in the ground or in walls are a common one.

What work requires using a licensed builder?

New construction work.  Work that is valued over $3,300 including GST.  Any work that involves altering the original house structure.  The conversion of non-habitable spaces like garages or under crofts to new habitable living areas.

As a property owner, what are my obligations to a building contractor?

This will vary depending on the scope of the work, but in most cases these conditions are met during the preparation of the contract, OR otherwise when a major contract is signed, you can meet any outstanding obligations within 20 days:
1. You need to give the builder evidence of your ownership of the property.  This can be as simple as providing a copy of your rates notice.
2. You need to give evidence of your capacity to pay the contract price.  For example, a letter from the bank advising that there are sufficient funds to cover the value of the contract price.
3. If you are contributing cash to the contract, a security account ensures the money is set aside for the contract.  This will be an account in the joint names of the owner and builder. The owner alone is entitled to the benefits of this money in a high interest earning account.  The money can only be withdrawn with a signature from each of the parties.
4. Where an existing property is worked on, you need to give the builder access to the site until the work is completed.  This is represented by providing a set of keys to the builder.  He may need to enter your home during work hours or in your absence to verify measurements or use the wash facilities.  Where a lending body is involved, the builder must receive notification building work can commence.

What is a ‘Contract Information Statement’?

Should be included at the back of every construction contract.  This is a requirement of the Domestic Building Contracts Act 2000, which stipulates the basic contractual requirements of both parties.

Is there a ‘cooling off’ period?

Yes there is a 7 day cooling off period after the contract is signed.  This came about to protect the general public from unscrupulous sales people in the new home industry.
Hardly relevant when in most situations a relationship has been built between a client and builder before a contract has been entered into.  I have had clients exercise this right, because they got a cheaper price after we did the contract?  Most clients are happy for us to progress with planning the work, rather than wait the required 7 days, this is your call.