Thinking about renovating? Avoid these common pitfalls for complete peace of mind

South Africans are spending more time at home than ever before. The Covid-19 Pandemic and its subsequent restrictions has seen South Africans spend 13.4% more time at home in January to May 2021 compared to the pre-COVID-19 period.

READ: Buying a Home in 2021? Everything Your Insurance Company Thinks You Know, But You Probably Don't

"This has resulted in a greater need for domestic furnishings and entertainment and real sales of household furniture, appliances and equipment increased by 18.3% y-o-y in 2020Q1," according to a PwC economic forecast report.

Trends also show the need to revamp our homes to incorporate a better Work-From-Home space or to cater for more Home-schooling needs have resulted in the decision to either renovate our existing properties or invest in an upgrade property that perfectly suits our needs. 

Even if you can't afford to up and sell right now - a small home renovation will add value to your home all the same. While there are certain jobs you can do yourself, most renovation projects require the services of a professional, especially when it comes to plumbing or electricity. 

It might seem like a good idea to hire an unqualified person and save some money - but the risks and pitfalls are real warns Santam's underwriting team.

Don't over-capitalise

Not all upgrades are equal, and over-capitalisation is a very real risk. In capitalising on the additional investment and maximise the return, it's essential your homework when it comes to building costs. 

The first step is to take into consideration the current value of your home, as well as property prices in your area, as neighbourhoods generally have a ceiling value. Consider this threshold up to which buyers and renters are willing to pay before making any major investments into your property.  

READ: When is a good time to sell your property and what affects its value?

Set a budget (but prepare for the unexpected) 

Work out a budget before the job starts. It's important to source at least two to three quotes from service professionals. Get all agreed amounts (with the full requirements, inclusions and exclusions) and required deposits down in writing.  

Big jobs will always bring up unexpected costs. Make sure your budget allows for it. It's worth checking with your service professionals if they can get a discount from a supplier they regularly use, which they can pass on to you. 

If you're buying the materials for the job, do online searches to check for your preferred styles, as well as compare prices. Always go for the best quality you can afford, as cheap is expensive in the long-run.  

Agree with the service professional on any payments to be made as the job progresses. Only make the final payment once you are happy with the job and it has been completed to your expectation and satisfaction. 

READ: How to save money on your home insurance

Keep your insurance up-to-date 

It is the homeowner's responsibility to ensure the house and contents remain adequately insured.

That is why it is imperative that you review your insurance policy at least once every year - but even more importantly after you've upgraded your property. 

This will prevent your home and contents from being under-insured, and protect you financially in the long run.

 According to Santam, industry data shows "one out of three homes in South Africa is underinsured by as much as 30% ".

"If you are underinsured, it means that the sum insured is less than the cost of rebuilding or replacing your buildings and structures. So, for example, if your home is insured for R500 000 but the cost of rebuilding it is R625 000, you are underinsured by 20%. That means that you will have to make up the remaining R125 000 yourself."

Try this handy building calculator tool to help you make an inventory of all the structures on your property. Or have a professional risk assessment done - click here for more info