Should I renovate or move? At one time or another most of us will have to deal with this decision. Maybe you have had some additions to your family, or a new hobby and need additional space. Do you upgrade your current home? Or do you put your home on the market and look for a new property?
You may feel that with your own home you have the advantage of knowing how the market has fared over time – and you are in a good position to estimate future its growth potential. However - be careful of over-capitalising such that the cost of your renovation exceeds the market value it will add to your home. Do some additional research in your local real estate market to gain an understanding of what existing homes are selling for and what gains have been made over the past few years.
Renovation costs also run out of control, due to unforseen problems that arise along the way. What is the condition of your current home? Depending on the extent of the changes which you have in mind, you may find that the potential cost of the renovation makes a move a more financially viable option.
If you do decide to renovate, consider finding a builder who will be prepared to offer you a fixed price contract.
If you decide to move house, remember that there are costs such as:
• Stamp duty
• Refinance costs
• Agent fees
• Legal fees and conveyancing costs
• Building and pest inspection reports
• Moving costs
On the other hand, if you decide to renovate, you will need to consider the costs of:
• Labour (builder and contractors)
• Materials
• Permits and council fees
• Design fees
• Inspection costs
• Repayments for any finance that you may require for your project
Location can be a major factor in this decision. The thought of leaving behind friends, possibly family, local schools can weigh in on the renovation side.
If you really like the area in which you live, but have outgrown your old house, possibly past the point of renovation – you could consider a knockdown/rebuild. This option is growing in popularity on crowded cities like Sydney. The downside is that you will have to pay rent in another property for the duration of the rebuild.
Do you want the inconvenience of renovating? Weeks and possibly months of dealing with builders in your home – or if you do it yourself, endless weekends of drudgery until the work has been completed.
Overall, you will need to do your homework and weigh up the advantages and disadvantages of each option.
