5 Ways to Avoid Over-Capitalising on Your Home Build

​In Perth, Western Australia, in 2024, it may seem silly to discuss over-capitalising when the real estate market over this way is HOT! However, so too are the building costs, so considering over-capitalisation is important.

At Distinct Building Company, we specialise in helping homeowners strike the perfect balance between creating their dream homes and making the right financial /building decisions.
 
 Here are five ways to guide you in avoiding over-capitalising on your home:

Set a Realistic Budget and Track It Closely
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​Establishing a realistic budget is the fundamental step in any home-building project. Your budget should encompass all aspects of your renovation or build, including materials, labour costs, permits, design and contingencies. To ensure financial discipline, track your expenditures meticulously throughout the project. Use budgeting tools or spreadsheets to monitor costs and identify any deviations early on.
 
It's crucial to communicate your budget clearly with your designer, builder, and any other professionals involved in the project. This transparency ensures that everyone is on the same page and can offer suggestions that align with your financial goals. For example, opting for cost-effective yet durable materials can help you stay within budget without compromising on quality.
 
Consider a kitchen renovation. The homeowner sets a budget but fails to communicate it effectively to their designer and contractor. As a result, the designer proposes high-end custom cabinetry that significantly exceeds the homeowner's budget. By discussing budget constraints upfront, the homeowner and professionals can collaborate on alternative solutions that achieve both aesthetic goals and financial feasibility.

Consult with a Local Real Estate Agent
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​Before starting any significant project, whether it be a demo and new build or a large-scale home extension, consulting with a local real estate agent can provide valuable insights into market trends and buyer preferences in your area. Agents have firsthand knowledge of what features attract potential buyers and can advise you on which renovations are likely to give you the highest returns on investment.
 
For instance, in a suburban neighbourhood with many families, an agent might emphasise the importance of having an extra spare room or even three bathrooms or a powder room. With this information, homeowners can prioritise renovations or new builds that align with market demands and increase their property's appeal.
 
Imagine a suburban homeowner considering a backyard renovation. By consulting with a local agent, they discover that families in their neighbourhood prioritise outdoor entertaining spaces and child-friendly spaces. This insight prompts the homeowner to invest in a nice undercover alfresco area with an outdoor kitchenette, thereby increasing the home's attractiveness to potential buyers in the future when they may sell.
 

Avoid Overspending on Cabinets and Fixtures
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Cabinetry and robes can be expenses in any home renovation, particularly in kitchens and bathrooms. While quality cabinetry is essential for functionality and durability, overspending on elaborate designs or unnecessary features/mechanisms can quickly escalate costs without adding proportional value to your home.
 
To illustrate, consider a homeowner when they are designing their kitchen. They would love 2-pac painted cupboards with a nice shaker profile, along with a bi-fold door pantry/ tea station or timber accent shelving that makes the space look ultra high-end. While all of this is great and looks amazing, potential homeowners will not see the 30% price increase on the cost of your cabinetry had you just kept it a little simpler and not gone for the higher-end costing items.
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Not everyone knows what things cost when it comes to cabinetry, but I can assure you, you that you need to rein it in if you are worried about overcapitalising your home, as the kitchen is where we see the biggest blowouts on our home builds. 

Invest Wisely in Curb Appeal and Landscaping
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​The exterior of your home creates the first impression for potential buyers and visitors alike. Curb appeal and landscaping can significantly enhance your home's marketability and perceived value. Focus on projects that improve your outdoor spaces' overall aesthetics and functionality.
 
For example, upgrading your front yard with native plants and drought-resistant landscaping enhances the visual appeal and reduces water consumption and maintenance costs. Installing outdoor lighting or a welcoming porch area can create a warm and inviting atmosphere that appeals to prospective buyers.
 
Do not overlook the impact of landscaping. It creates so much curb appeal and makes driving up the driveway daily so much better!

Opt for Timeless Design Features
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When making design choices for your home, aim for timeless appeal rather than following momentary trends. While unique or highly personalised features can showcase your individual style, they may not resonate with future buyers. Opting for classic design elements ensures broader appeal and longevity.
 
For instance, neutral colour palettes, clean lines, and durable materials like hardwood flooring or granite countertops are timeless choices that withstand changing design trends. Incorporating flexible spaces that can adapt to different uses over time adds functional value and appeals to a wide range of potential buyers.
 
Imagine walking into a new home on the market, and the front living room has been painted in your most hated colour! This will automatically stop you from buying the house without knowing it. Then you will, in your mind, devalue that home. So, just be mindful of your individuality and flair if you are considering selling the house in the near future.
 
 
In conclusion, navigating the complexities of home building in Perth requires thoughtful planning, informed decision-making, and expert guidance. At Distinct Building Company, we partner with homeowners to achieve their vision of their home. Whether renovating to improve your living space or preparing to sell, Distinct are here to help.
 
Contact us today to learn more about how we may be able to help you with your new build.