On complete valuation to avoid overcapitalisation etc.


I am a long time reader of this forum. Thanks to all contributors helping out with sharing their experiences.

Sorry in advance if my questions has already been answered before. I couldn't find anything relevant to my questions when I searched the forum.

We are currently planning our first renovation. The idea is to refinance once renovation is complete, and then buy a new IP. We purchased this property around 2 months ago, and is currently our PPOR.

As it is our first foray in to the renovation world, we do not want to overcapitalise. We are a bit flexible on budget, if the expenditure adds good value. The problem is that we are not too sure how to decide on what adds good value(every renovators nightmare?). We discussed our ideas with a couple of experienced local RE agents(I am talking about extending the upper level deck and adding a fence). We got contrasting opinions on those. So confused on whether we should do those changes.

I am toying with the idea of getting an independent valuer do an *on completion valuation*(Note: Renovation will be funded by our own funds and not a construction loan). This way we get a more concrete opinion on our plans. I do understand that the valuation after renovation might vary from the pre-renovation one;depending on the quality of work, market changes etc.

In my research, I couldn't find any references on the Internet about doing an on completion valuation(unless a construction loan is needed). Has anyone done this while renovating? I feel I am missing something obvious. Isn't it the best way to make sure your do not overcapitalise? And also we can get an idea of what changes will add what value?

I am splitting a few rooms and tidying up the place at minimum. We think we bought the property at a good price (under market value). My Mortgage Broker mentioned that the renovation will have to appear as significant for the bank\valuer to consider a sizeable valuation increase. This is because they just recently did a valuation when home loan was approved. That is one of the reasons I am planning to extend deck and/or add fence;to show something significant was done. Just want to make sure we do the valuation at right time with right changes. Any thoughts on this?

Do all valuers use a common system? I was wondering if the bank's valuer will have an idea of the on completion valuation? Is the valuation report something I can show the bank's valuer (to influence them :) )? I guess I should ask these questions to the valuation firm.

Any recommended valuer in the Gold Coast area?

I started the post intending to ask just 1 question but have ended up with so many :) Maybe I should add separate posts for each question?

Thanks in advance.
The best safeguard against overcapitalisation is knowledge of the market, and the values of your property both pre and post renovation.

How confident are you about those?

If I know an area well, I can almost instantly eyeball a property and have a decent idea of values and what a renovation budget needs to look like.
As a general rule, fences do not add value. Extending a deck - unless it's a massive extension, probably not much either.

Things that do add value are numbers of bedrooms, bathrooms, and car accom are the real kickers. If your property needs a paint, floor treatment or window treatment, these can also help.

On completion Vals could only be done if you tell the Valuer all the specifications and costs of the reno. You probably don't know this.

I'd suggest you get out to some Open Homes and look for some comparable sales of what your property would look similar to once done