Renovating, and Building Equity in Your Home: Tips For Owner-Builders

Real estate agents agree, saying that over the past five years they have noticed an increase in the number of owner-builders doing sophisticated renovations and increasing their property’s value by tens and sometimes hundreds of thousands of dollars.

“As well as the do-it-yourself market, there’s also a very healthy do-it-together market,” says Harley Dale, chief economist with HIA. “A professional will be called in for some of the more complicated renovation work while the rest is carried out by the individual.”

The Victorian Building Commission says that although there’s been a reduction in owner-builder registrations since the market peaked in 2004-05, it’s still a popular method for building or renovating.

Building commissioner Tony Arnel claims new laws restricting owner-builders to one home renovation in any three-year period has contributed to this, as have more stringent laws requiring owner-builders to obtain a certificate of consent for building works.

But Archicentre claims that 28 per cent of building permits issued in Victoria are to owner-builders.

“People are also beginning to realise that their current home may increase in value by more than the sum of its renovations if done properly, and are electing to reinvest into it and enjoy the benefits,” says Mr Caulfield.

Most owner-builders aim to add value without adding cost, achieve a stunning result and finish up with a house that offers a great renovation, says Mr Caulfield. “What they don’t want is cost overruns, time blow-outs, dodgy builders or to overcapitalise.”



Get it in writing:

For your peace of mind, and to give yourself a legal leg to stand on, it’s important to write down every detail of what your renovation is to include – from the number of power points to the number of coats of paint.

As well as limiting any nasty surprises, it also helps tradespeople give you an accurate quote.

Also ask contracts to list start and finish dates, and progress points – known as a building schedule – so you will know if the time frame is blowing out. Build time frames into contracts with builders and subcontractors. Don’t start work until you’re satisfied every detail is clarified.

Get on the blower:

Local councils are a good source of information and should be contacted before embarking on any renovation.

Martin Coleman, president of Termite Action Victoria, a non-profit organisation leading the way for termite prevention strategies, says it’s important to give your property a clean bill of health before starting any renovation.

“Council planning departments will also be able to answer any questions about planning and building permits,” he says.

Building works of greater than $5000 require a registered builder. This information is available at the Building Commission’s website.

It’s worth talking to real estate agents too, as they can give you the best guide as to what your property will be worth after any renovation.

“There was a recent case in Box Hill where a couple demolished a third bedroom to put in an ensuite and walk-in robe for the master bedroom,” Mr Caulfield says.

“Though the renovation was stunning, the house went from a three-bedroom to a two-bedroom and actually dropped in value by $20,000.”

Get permits:

“Owner-builders must be aware of the requirements of being an owner-builder and fully understand their responsibilities,” says Mr Arnel. “The most important thing an owner-builder can do is be informed.”

Permits need to be obtained any time you affect anything to do with the structure of a house. People are often surprised to learn permits are required for jobs such as a balcony, restumping, or removing a window to put in a wider opening such as a french door.

Skimping on permits might cost you down the track – especially as the law can come down on you for a negligent renovation that may have injured someone.

Get insurance:

“Owner-builders take on all the responsibilities of registered builders, including safety and insurance requirements,” says Mr Arnel.

You will need owner-builder insurance, so make sure you have the right cover so you are protected against all possibilities. Visit

Don’t be fooled:

Avoid builders who offer a discount on construction costs should you register as an owner-builder. This is one of the fastest growing tricks in the book. Doing so means they may be unregistered – and the onus of responsibility for their work falls on you. If you’re registered as an owner-builder, it is up to you to provide the warranty for the building works should you decide to sell.

Shop around:

“The price difference between builders for any one job can be huge,” says Mr Caulfield. He says renovators should get at least three quotes for every job proposed in the house.

“For one renovation job we were involved in, one quote came back at $331,000 and another at more than $580,000,” he says.

Tender moments:

A good place to start recruiting builders and subcontractors, according to Archicentre, is to advertise in the tenders section of a newspaper.

“Builders regularly check this section for work and it’s one of the easiest ways to have them come to you,” says Mr Caulfield.

Choose wisely:

Make money, don’t burn it: choose your fittings and fixtures carefully to avoid overcapitalisation. Adding value, not cost, is the recipe for making money with a home renovation, according to insiders.

“Don’t be seduced by the thought of expensive fixtures and fittings,” says Mr Caulfield. “Make sure that any use of more extravagant and expensive fittings is for your enjoyment only.”

Agents agree, saying overcapitalisation is one of the biggest traps people fall into when renovating – and will eat into the pool of profit a renovator can make.

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Marc Pallisco

A former property analyst and print journalist, Marc is the publisher of