Asked 4w ago
How do you budget a renovation fee for 4-5 rm resale HDB?
Suppose I have $50k cash savings, is it advisable to still set aside 6-12mths living expenses/emergency fund etc?
Is renovation loan a sensible approach?
Based on my own experience, $30k renovation will be able to cover most of the basic stuff. If you want some fancy design, you will need to allocate $50k. And I don’t think reno loan is a good idea as you still have mortgage loan to serve, so it will be additional burden.
Let's answer the second question first: No, renovation loan is not a sensible approach. Generally, the interest rate is high and unnecessary if you have made prudent cashflow and budget planning ahead of time.
Firstly, we need to decide how much work to do for the renovation, e.g. hacking, shelving, tiles, plumbing, electricity. The more extensive the renovation, the higher the cost of renovation.
For basic renovation, it should cost about $30k. For complex renovation, the sky is the limit. Thought I will suggest to keep it below $80k.
There are two steps in our budget planning. Firstly, we need to have a complete understanding on our cashflow. Through this process, we will understand our earning ability and spending habit. Here is a guide to help you: https://www.blog.pzl.sg/understanding-your-personal-cash-flow/
Next, we will create a budget that is capable of helping you pay for the renovation. The best way to do this is via automation and this is how I do mine: https://www.blog.pzl.sg/how-to-create-a-monthly-budget/
Yes, it is recommended to have your emergency fund on top of the budget for your renovation. For the most part, you cannot renovate 90% of the house because you need 10% of the funds for other expenses right?
With this in mind, get a complete understanding on your cashflow to determine how much emergency funds are required.
Thereafter, decide on the renovation plan and stick to it.
Once this is done, calculate the shortfall and create a budget that is capable to help you reach your goal.
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Hi, for a resale flat, renovation is generally more expensive due to the existing work done in the house that needs to be torn down and redone. I would budget say 60 to 100K for a 4 to 5 room resale hdb.
Yes please, you'd still need your emergency funds in place apart from your 50k savings.
Renovation loan can be a sensible package if you do not have sufficient cash. You can engage a broker like Redbrick to help you source for the cheapest Reno loan and sometimes they are able to give 6 months interest free rate, so you should take this opportunity to pay back as much as possible.
You can refer to this article for more info on how to finance your renovation: https://www.google.com/amp/s/www.99.co/blog/singapore/finance-home-renovation-furnishing/amp/
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