To Renovate or Not to Renovate?
Renovations are often seen as an economical alternative to building a new home. Numerous DIY building shows continue to inspire us to renovate when in fact renovating is not always appropriate. It’s never as easy as it looks and people often end up spending more money and waiting longer for results that are less than satisfactory.
While it does normally cost significantly more to build a new house, there is much misconception as to how much value there is in renovations. Labour costs in Australia are one of the largest cost considerations in the building industry and renovations are labour intensive. Furthermore, there is so much work that is unseen and difficult to quantify in trying to rectify old defects or in marrying old structures with new. A new build, by contrast, allows every nail and piece of building material used on site to be seen and accounted for. There is much more assurance that you are getting what you pay for, as opposed to spending $10,000 rewiring a few rooms in an old house and not seeing the difference.
To make things harder, there are few building contractors who enjoy renovating because of its fiddly nature. The few who do take on renovation works thus tend to charge a premium. Estimating what a renovation might cost is another headache as there are always so many unknowns. What logically should only cost $500,000 can easily blow out to $800,000.
At WOLF ARCHITECTS we always ask our clients to carefully consider the reasons why they might want to renovate. With heritage protected properties a renovation or extension may be the only option, but in many instances people feel they should renovate because they don’t want to waste what still seems to be a perfectly good structure. While we agree that it is wasteful to pull down sound structures, it’s just not economical to try and expand or enhance existing structures due to the high labour costs. Another factor to keep in mind is the long-term value of the property. While a renovation may at the time seem like a good solution, in the long term it could devalue your project and limit resale potential.
Renovations are always a compromise and often susceptible to more criticism than new buildings. An original, un-renovated property or a brand-new build is more appealing than someone else’s renovation, unless however there was a reputable architect involved. This brings us to the issue of design. Most renovation projects disappoint due to a lack of intelligent thinking. How to marry old and new and finding a style or language that makes it all work can be highly complex. Creating an extension that matches the period of the house might seem appropriate, but could in fact be seen as unauthentic and may not work practically with modern day living. Contrasting the old with new, contemporary work does not always work either. Each case is different and a highly skilled architect is required to find the best way forward that adds value.
So are renovations in this day and age completely out of the question?
The issue here is about avoiding the grey areas of renovating. Your budget must either be so small that a new build is totally out of the question, or plentiful enough that over capitalizing is of no concern. Anything in between is what we would call “grey” and may or may not bring value for money.
If your budget is small there is probably not a lot of choice, but we would encourage you to be very careful and selective with where you spend your money. Unless your budget is over $500,000, structural changes must be kept to a minimum. Remember that a new kitchen alone can cost anywhere between $30,000 and $100,000. You will also need a larger contingency fund for all those hidden issues that naturally arise when old things are pulled apart.
If you need to extend out or upwards it’s important to understand how to connect the new area with the old and how it will all ultimately function together. Understanding the existing structure is critical and original documentation can be difficult to source and even if found, cannot necessarily be trusted. A lot of careful research and investigating is necessary and this is where the benefits of hiring a good architect become apparent.
As with builders, an experienced architect will command higher fees for smaller jobs and renovations due to their complicated and time-consuming nature. Our position on renovations is that we only tackle them when there is no other choice (due to overlays) or when a client is particularly sentimental about what must be kept. In either case the client’s expectations must be realistic with regards to both costs and time frames.
At WOLF ARCHITECTS, the smallest renovation/extension projects have a budget of $750,000+GST. This would typically allow $500,000+GST for the new build and $250,000+GST for rectifications to the existing building and any landscaping works. Our larger renovation projects extend from $1 million upwards, with some being highly complex and taking years to complete.
As far as our design fees are concerned we can’t charge less for a renovation than a new house of the same size because renovations are often more work. This, unfortunately, can be perplexing to customers who approach us believing that their renovating project is an economically viable solution. In some cases, where the renovation works are extensive, with complexities in town planning, architect’s fees might be anywhere from 13-15% of the construction cost. It is therefore usually only clients with a budget of over $1 million who can warrant the relatively high architect’s fee incurred by renovation projects.
Any investment over $1 million is significant and in situations where there are no overlays it is our responsibility to ask our clients to consider what they might get for a new build for the same investment, or if they could extend the budget further. If the value of a new build significantly outweighs the compromises of a renovation, then it may be that the renovation was not the best solution.