To avoid overcapitalization in a luxury home renovation, a rule of thumb involves spending less than 10% of the purchase price.
In Hong Kong, there are certain exceptions to this rule based on the property itself and its location. Property valuation is another important task to prevent an overblown budget for renovations.
If you’re planning a luxury home upgrade, the perennial choices include bathroom remodels and new flooring. Here are simple ways to avoid overspending on a luxury home renovation in Hong Kong.
Money matters for luxury home renovations are often tricky, but every unaccounted penny can spell disaster.
Don’t Spend More Than 20% On Deposits
Money matters for luxury home renovations are often tricky, but every unaccounted penny can spell disaster.
Your chosen contractor should be willing to accept 20% of the project’s value as a deposit amount. It’s even better if they agree to 10% or receive installment payments for each step in the development process.
The deposit shouldn’t cover payments for custom furniture, which should be settled after delivery.
Many homeowners in Hong Kong end up in an argument with contractors solely because of issues with custom furniture.
If you’re renovating a new luxury estate, check out the Hong Kong Housing Authority’s reference list of decoration contractors.
Be Aware Of Industry Guidelines
You can avoid spending more than necessary on a luxury home renovation by knowing industry guidelines. In response to common complaints, Hong Kong authorities released standardized rules for home decoration.
For example, CoDeco’s Hong Kong Renovation Guidelines (Chinese version) offer insights on 15 primary types of renovation work.
OKAY.COM also cited two scenarios among the most common disputes between contractors and homeowners:
- A contractor charged extra for a paint job after discovering a water leak.
- Late deliveries for customized appliances prolonged project timelines.
The second scenario typically happens when a homeowner blames the contractor for not devoting enough time to buy custom appliances.
The contractor would then refute this claim by saying that the homeowner couldn’t provide accurate sizes for appliances, hence the delay.
A detailed contract should prevent most of the common disputes when it has the following elements:
- Itemized prices
- Project duration
- Terms and conditions
- Warranty coverage
If you’re renovating a new luxury estate, check out the Hong Kong Housing Authority’s reference list of decoration contractors. It should guide you in drafting a contract to protect your renovation plan.
When it comes to Hong Kong real estate, market activity, including property sales, dictates the general price movement.
Know Your Property’s Valuation
A luxury property valuation remains important even when you don’t plan on renovating or selling your house in Hong Kong. In fact, you should ideally have your property appraised every year.
Market activity, including property sales, dictates the general price movement. For example, the median sale price for every district and region in Hong Kong vary based on different factors such as:
- Architecture (e.g. design, style)
- Landscape
- Demographics (e.g. exclusive homes)
Each area also has a ceiling value for the sale price, so accuracy is important for determining a valuation. For this reason, you’ll need a trustworthy agent with extensive knowledge of crunching numbers.
OKAY.COM also describes an ideal agent as someone who instinctively knows the average sale prices for renovated and unrenovated properties in your area.
If you’re still unsure of spending within budget, you should find a trusted agent in Hong Kong.
Stick To A Firm Budget
For every HKD 10 spent, there’s a HKD 5 return (or something similar to this concept).
While it will help you with sticking to a firm budget, it isn’t enough to tick off nice-to-have features on a luxury home renovation in favor of essential upgrades.
You also need to know how a luxury home improvement can maximize the property’s resale value.
If you’re still unsure of spending within budget, you should find a trusted agent in Hong Kong. A competent real estate agent spares you from the discomfort of talking about money with contractors, which can be awkward at best.
