Thinking of a knockdown-rebuild?  Senior Writer Georgia Madden from Houzz Australia spoke to three experts to reveal nine costs homeowners often forget to include in their knockdown-rebuild budget – so you don’t!

If you love where you live, but your home is beyond repair, a knockdown-rebuild can be a smart decision. For property investors, it can also present an opportunity to make a profit. And, according to Housing Industry Association (HIA), they are a growing trend. Over 10 percent of new homes in major Australian cities are likely to be knockdown-rebuilds, and even more in some areas. “As our major cities grow, it is becoming more commonplace to have an existing home demolished and a new home rebuilt in its place,” says Kristin Brookfield, HIA chief executive industry policy. “In Sydney this has been happening since the early 2000s as land prices increased and new land supply slowed. Other cities have not seen as big a shift, but it’s definitely happening across the country today.”

“A knockdown-rebuild gives you the opportunity to replace something old and out-of-date with something new and contemporary. It also means you can build exactly what you want instead of trying to make something work in a pre-existing home,” says Tam Wrigley, a property developer, renovator and real estate investor. But it’s crucial to have the full picture of costs before you start, says Lloyd Edge, director of Aus Property Professionals. “If you don’t consider all the associated costs of a knockdown-rebuild, you can blow your budget and find yourself unable to afford to finish the job or forced to make compromises.” Here are nine potential costs you need to be aware of.

1. Disconnecting Services

“Most people take into account demolition and dumping costs when they’re planning a knockdown-rebuild, but they often don’t factor in the cost of disconnecting services such as electrics, gas and plumbing,” says Naomi Findlay, designer, creator and renovation educator. “The work needs to be done by qualified electricians and plumbers, and can’t be avoided when you’re demolishing and rebuilding a home.”

2. Extra Council Fees

Depending on what your new build plans include, you may find yourself with higher council costs, says Wrigley. “For example, if you were adding a granny flat or dual-living arrangement to the property, substantial infrastructure charges may be required. This would also apply if you were to go up a level,” she says.

3. Water Corporation Fees

“Recently, water corporations have been separated from local councils and, as a result, they have their own fee structures,” says Wrigley. “If certain forms are not lodged with these corporations as part of your building process, it can delay the process and cost you more – not to mention the increase in fees.”

4. Varying Demolition Costs

Demolition costs are not one-size-fits all, says Edge. “Many homeowners only budget for basic knock-down of their home, however there may be several other costs involved. For example, if you are building a larger house than the original one, you may need to move a tree in the backyard.”

5. Contamination

“If the site is contaminated – say, if there is asbestos internally – this can really add to cost of a knockdown-rebuild,” says Findlay. “Asbestos needs to be removed by a specialist and it doesn’t come cheap.”

6. Upgrading Old Footings

“Depending on the soil type and whether the previous building has been on the site for a long time, you may need to upgrade to more expensive footings when you build your new home,” says Wrigley.

7. Holding Costs Arising From Weather Delays

Bad weather can hold up a project, which can bump up the budget, says Wrigley. “It can delay the completion date and impact interest repayments and other holding costs,” she says.

8. Tricky Site Access

Access to the site is an important consideration when you’re working out a budget for your knockdown-rebuild, says Edge. “It can cost more if you live in a remote area, a battle-axe block, or even if your house is located on a busy road and you need to get traffic management control from council. This will add costs to both the demolition of your existing house and the construction of your new one,” he says.

9. Alternative Accommodation

“When you’re working out your budget, be sure to include the rental costs of where you’ll be living during construction, plus any commuting costs from this location,” says Findlay.

Other Considerations

“Unless you take the path of owner-builder, you will need to sign a contract with a builder who is responsible for building your home under their licence,” says Edge. “Your bank will release portions of your loan to your builder in stages through the construction loan. So, unlike with other trades who you can replace, the relationship with your builder is binding and needs to remain on good terms or things will get messy. “Insist on signing a fixed-price contract. You will also need a contour survey, a soil test and a site inspection from the builder, which will add to your build costs,” he says. “I suggest approaching at least three builders and requesting quotes and ask for their scope of works,” says Edge. “Not all builders do demolition, so also be sure to ask them if they offer this service. “I’d also advise approaching a demolition company independently of a builder and getting a quote for the demolition to see how the cost compares,” he says. “If the project is large-scale, using a quantity surveyor would also be prudent,” adds Wrigley.

Here at Hurst Homes we offer complete customised homes that can be as individual as the owner. We guide your through the entire process including your selections to ensure you create your dream home. Just another reason why we are considered Waggas best builder. With over 30 years in the industry as a Wagga Builder you can trust Hurst Homes with your dream home. For information on our upcoming custom wagga house & land packages, contact us today on 0438 692 962 or fill out the contact us page on our website.

For more tips and tricks from the Houzz experts visit Houzz.com.au