Question: I’m considering doing my first renovations project. I’ve read countless books and other material about the topic and don’t think I’m going into it too blindly. Since I’m currently living with my parents (I do pay them rent though), I’m thinking, what the hell? Why not live in the property while it’s been renovated. I’m just curious if there are any drawbacks I haven’t thought of. I know the house will be a mess, but will it take any longer to do the renovation if I’m living there? I’m imagining the project taking around six months.
Answer: Leaving home is no small decision, but when you add to that the desire to ‘buy’ rather than ‘rent’ and on top of that – take on a ‘live-in’ reno – then we’re talking a significant step up in life. For that, you need to take a bow!
The way I see it, since you’re a first home owner, taking advantage of capital gains savings and government incentives while adding value to a home, is one of the fastest and most effective ways to increase your capital base for further investing.
That said; it’s not all roses and sunshine. Here are some things to consider:
- You get to keep the price change you make to your own residence (often tens of thousands of dollars with no capital gains tax)
- You only pay for one roof, so you save costs
- You are there to let in tradespeople in the morning and can answer their questions on the spot, showing them exactly what you want and where you want it
- You get to oversee the work done on the house each day
- You don’t need to travel to get to the renovation job and you’ve got easy access for doing any of the work yourself. You can also work as late as you like
- If you want to grab a beer or snack during the day’s work it’s right there
- You might have to give up your social life for a while. The same is true for your dating life. Significant others are usually not too interested in staying overnight when you’re living out of a sleeping bag on a blow up mattress surrounded by sawdust, power tools, lumps of timber and plasterboard.
- Living in mess, upheaval and disruption for extended periods of time wears you down. You will get sick of it before it’s over and your ability to stay focused will be challenged
- You don’t get a lot of alone time: with trades people banging on the door at 7am to get started, you’ll have to change your body clock to “early riser” to greet them
- While it’s nice to have some home comforts around you, the risk is that days can get shorter and shorter, so some self-discipline will be required not to down tools at noon after a 9.30am start
- Live-in renos do tend to take longer. Trades people need to work around you, just as you will need to do. Because of this, live-in renos can also cost a little more
In essence, the benefits of a live-in reno is the equity growth and the education you receive from living, eating, sleeping and breathing changes to your own home. Combined, this puts you in a great position to begin a path towards financial freedom through property.
The costs are more of a personal nature – the social inconvenience and the exhaustion. However, these are short term inconveniences that are quickly forgotten. For me, on the proviso that you do all you can to guard and protect your health, the long term benefits substantially outweigh the costs.
- Answer provided by Brendan Kelly, RESULTS Mentoring
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