To move or to renovate? That is the question.
They say ‘home is where the heart is’ but sometimes that home can start to feel a little small, run-down or outdated. When you eventually find yourself faced with this dilemma, you’ll often consider one of two options: to move or to renovate.
Each comes with its own pros and cons and, depending on your personal circumstances, one will be far more suitable than the other.
The million-dollar question is: how do I figure out what’s best for me?
The answer is to research, research, research and our handy guide can help you get started.
There are a number of reasons why you might want to go down the reno route. You might love where you live, or have a strong community around you.
If you fall into this category and decide to commit to a property overhaul – whether you make minor cosmetic renovations or plan to undertake a major rebuild, it’s important to know how to do it without running into a renovation nightmare.
To make sure your project runs smoothly it’s fundamental to prepare and think about overcapitalisation, costs and builders.
Organise a building inspection and land area survey: Before you begin on renovations and construction, you’ll need to organise a building inspection and land area survey. This step provides you with the peace of mind of knowing your house is structurally sound and will be able to withstand a renovation, as well as to check that your boundary lines are in the right position to avoid encroaching on your neighbours’ property.
Create a strict budget: Once you have the green light to go ahead with your project, create a strict budget for the renovation to help you avoid overcapitalisation. This occurs when the amount of money you invest into renovations exceeds how much value it adds to your property.
The most effective way to work out the sweet spot for your renovation budget is to follow these simple steps:
- Get your house appraised to find out its current value.
- Get an idea of the average price of the homes in your neighbourhood, as well as the ceiling price in your neighbourhood – that is, the maximum people are willing to pay for a home in your area. From here, you can arrive at a ballpark figure of what you should be spending on renovations. Remember you don’t want your home’s current value plus the cost of renovations to exceed the average price of a property in your local area.
- Armed with your ballpark figure, you can now create a budget for your project that will ensure you don’t overcapitalise. Some of the costs you’ll need to factor into your budget are labour, materials, permits and council fees, design fees, inspection costs and repayments for finance.
Choose the right builders: This is a crucial step of the renovating journey and can make or break your home improvement. Start by sourcing reviews of potential contractors – be sure you’re employing reputable, licensed trade professionals. Legitimate tradies will be happy to provide contacts and references of recent jobs completed. Don’t rule out visits of these past jobs to double check the quality of your prospective builders’ workmanship, and to check if they were completed on schedule and on budget.
Secure finance: Renovations are costly and you’ll need to decide how to finance your project. There are several options to consider, some of which include:
- Dipping into your savings
- Adding to your mortgage
- Refinancing your existing home loan
- Accessing the existing equity in your home
- Taking out a personal loan
If you choose to add to your mortgage, refinance, access your home’s equity or take out a personal loan, be sure you’re fully aware of the additional repayments you’ll need to make, on top of your existing loan obligations. It’s better to be realistic now than sorry later.
Other things to consider: on top of all the above considerations and depending on the size of your project, you may also need to factor in rental costs, if you have to live elsewhere during the renovations. Unless you have the help of generous friends and family, this could be a significant added cost to consider when budgeting for your renovations.
Buying a new home
When renovating is out of the question or the lure of a new start in a new location may be too strong to resist, buying a new home may be the way to go.
Just as there are many considerations involved in renovating your home, buying a new home also requires a lot of research and, of course, time and money.
Location, location, location: First and foremost,take the time to consider where you’d like to relocate. Once you have a general idea of the area, do your research to see if you can afford the neighbourhood and if it will be suitable for your needs. Some features you might need to factor into your research are local schools, cafes, shops, public transport, parks and other amenities.
Inspect carefully: In the excitement of finding your new dream home, you might find yourself overlooking a fundamental step of the home buying process – pest and building inspections. Before you sign any contracts, be sure to employ a trusted professional to undertake thorough inspections and provide you with a comprehensive report on the state of your potential new home.
Financing the move: As convenient as it may be, you shouldn’t forget that moving can be equally as stressful as undertaking a renovation. The most significant stressor of which is the costs associated with moving and buying a home.
On top of removalist's fees, you’ll also need to take into account a range of costs, including agent’s commission, legal fees and stamp duty. If you’re selling your home you’ll need to add to that fees for agents, conveyancing, marketing, maintenance, photography, settlement and the styling and staging of your property.
Whichever option you choose to go with, you can rest assured knowing you’re as well prepared as you can be to avoid unexpected nightmares. Just remember that when renovating or moving homes, think as far ahead into the future as you can. It’s wise to be prepared for your current and future needs so that you can stay put in your newly renovated home or new property for as long as possible.