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World's worst home renovation disasters

World's worst home renovation disasters

Television home makeover programs make it look so easy. Constructing a vertical garden, adding an en suite, or even a lick of paint and your home will be irresistible to buyers and worth thousands of dollars more.

That’s the theory, but in reality there is often not a lot of money to be made out of renovating. What’s more troubling is that many households draw on home equity, or extend the mortgage to cover the costs, which can be risky business.

While you might believe your home represents the height of sophistication, potential buyers may not agree. In some cases, home ‘improvements’ can kill a sale or wipe value of the sellers’ home.

Here, property experts from around the world share their tales of the worst DIY disasters, to help you to avoid making them.

Bold design

Natalie Stappers from Paramount Properties in the UK, sees a lot bold design features which detract from the bones of a house and send potential buyers running.

She recalls one client’s large collection of dolls and dolls’ heads: “Needless to say most people viewing the property found it quite off-putting and it wasn’t until the owner moved out, dolls’ heads included, that the offers started to roll in.”

One seller even had his naked wife painted onto his bedroom wall, recalls independent agent Russell Quirk: “His fairer half’s parts were unavoidable as prospective buyers viewed the room. It wasn’t exactly an enticement and it’s safe to say that the rest of the property’s décor was rather unique.”

Luxury additions

As glamorous as a home gym or hot tub may sound, they may not increase the value of a humble home.

Mary Anne Cronin, principal of Raine & Horne Bondi Beach, sees a lot of families who overcapitalise through renovation.

One client of Cronin’s bought a semi-detached home in Sydney’s Bondi for $1.1 million and spent another $750,000 on an extensive renovation, she said. The renovated home would not fetch $1.8 million on the market if the owner wanted to sell soon.

“It depends on your long-term view,” Cronin said. “If you’re staying there for many years and you are doing the renovation for your enjoyment, then it’s worth it.”

Maintenance nightmare

Failing to tackle grit and grime can also kill a sale, or at least wipe thousands off the value.

“You can have the most beautiful home with one bit of mould in a ceiling and the buyer will focus on that and fear the worst, said Tom Offermann, an agent operating in the Queensland market of Noosa.

Minor renovations, he said, such as repairing rotted timber, removing mould and rusty gutters, repairing squeaking or jamming doors, as well as proper maintenance and cleaning are OK.

“They can be highly beneficial to achieving the best price,” he told News Ltd. “There should be nothing that a buyer sees when they walk into a home that makes it look like it would be a maintenance nightmare.”

Heritage fails

Another risky area where homeowners can do expensive and irreparable damage is the removal of period features.

Think twice before splashing out on alterations that do not fit the existing character of the house – not only could this devalue a home, it may fail to comply with heritage guidelines. Each state and territory has different arrangements, legislation and requirements for the care of heritage properties so it’s vital to seek out this information before you go down the renovation route.

Mortgage lenders will also want to ensure you are adding value and not detracting from your property, so it’s worth asking for advice if you’re not sure.

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Learn more about home loans

Cash or mortgage – which is more suitable to buy an investment property?

Deciding whether to buy an investment property with cash or a mortgage is a matter or personal choice and will often depend on your financial situation. Using cash may seem logical if you have the money in reserve and it can allow you to later use the equity in your home. However, there may be other factors to think about, such as whether there are other debts to pay down and whether it will tie up all of your spare cash. Again, it’s a personal choice and may be worth seeking personal advice.

A mortgage is a popular option for people who don’t have enough cash in the bank to pay for an investment property. Sometimes when you take out a mortgage you can offset your loan interest against the rental income you may earn. The rental income can also help to pay down the loan.

What are the features of home loans for expats from Westpac?

If you’re an Australian citizen living and working abroad, you can borrow to buy a property in Australia. With a Westpac non-resident home loan, you can borrow up to 80 per cent of the property value to purchase a property whilst living overseas. The minimum loan amount for these loans is $25,000, with a maximum loan term of 30 years.

The interest rates and other fees for Westpac non-resident home loans are the same as regular home loans offered to borrowers living in Australia. You’ll have to submit proof of income, six-month bank statements, an employment letter, and your last two payslips. You may also be required to submit a copy of your passport and visa that shows you’re allowed to live and work abroad.

Can first home buyers apply for an ING home loan?

First home buyers can apply for an ING home loan, but first, they need to select the most suitable home loan product and calculate the initial deposit on their home loan. 

First-time buyers can also use ING’s online tool to estimate the amount they can borrow. ING offers home loan applicants a free property report to look up property value estimates. 

First home loan applicants struggling to understand the terms used may consider looking up ING’s first home buyer guide. Once the home buyer is ready to apply for the loan, they can complete an online application or call ING at 1800 100 258 during regular business hours.

How do I apply for a home improvement loan?

When you want to renovate your home, you may need to take out a loan to cover the costs. You could apply for a home improvement loan, which is a personal loan that you use to cover the costs of your home renovations. There is no difference between applying for this type of home improvement loan and applying for a standard personal loan. It would be best to check and compare the features, fees and details of the loan before applying. 

Besides taking out a home improvement loan, you could also:

  1. Use the equity in your house: Equity is the difference between your property’s value and the amount you still owe on your home loan. You may be able to access this equity by refinancing your home loan and then using it to finance your home improvement.  Speak with your lender or a mortgage broker about accessing your equity.
  2. Utilise the redraw facility of your home loan: Check whether the existing home loan has a redraw facility. A redraw facility allows you to access additional funds you’ve repaid into your home loan. Some lenders offer this on variable rate home loans but not on fixed. If this option is available to you, contact your lender to discuss how to access it.
  3. Apply for a construction loan: A construction loan is typically used when constructing a new property but can also be used as a home renovation loan. You may find that a construction loan is a suitable option as it enables you to draw funds as your renovation project progresses. You can compare construction home loans online or speak to a mortgage broker about taking out such a loan.
  4. Look into government grants: Check whether there are any government grants offered when you need the funds and whether you qualify. Initiatives like the HomeBuilder Grant were offered by the Federal Government for a limited period until April 2021. They could help fund your renovations either in full or just partially.