One of the biggest reasons why people decide to look for a new property is down to a growing family and the need for more space – they simply outgrow their home. But which property do you go for? Do you look for a brand new property or stay put and renovate your current home?
One of the reasons many people choose to renovate their current home is because they like the area and feel established here. Their friends or family may live close by, and local schools where their children attend are easily accessible as well as important amenities such as shops and public transport.
However, you will need to find out from the local council whether you can renovate your home, and if so you should try to get your neighbours on side so that your renovations are approved without objections.
It is important to bear in mind that renovations are typically known for going over budget as well as over time, so this should be factored into your plan of action. You will also need to have initial drawings or sketch plans drawn up, and this can cost you anywhere between $3,000 and $10,000. Make sure you get at least three different quotes from reputable companies and an approximate timeframe of the job.
You should also consider other costs such as the material costs, council fees and permits, labour costs and inspection costs which can all add up.
A major drawback of renovating is the amount of disruption that this can cause on your home and your family. You might have to still live in your home whilst the work is being carried out which might not be ideal and become quite stressful.
Looking on the positive side, a renovation can add value to your home and has future growth potential if it is in the right location with good demand; however you should not over-capitalise on this as you might not get as high a price as expected. That being said, you do already know what you paid for the property and can work out its current value and see how it has performed over time, giving you a good estimation of growth.
There might be times when renovating your home is not an option. Reasons for this include:
- The area has gone downhill since you bought and you want to live somewhere nicer.
- You are unable to renovate your home due to your local council’s regulations / objections.
- The property has serious problems and would cost a huge sum of money to fix, making it an unworthwhile venture. A building inspection would show you if there are problems.
- You don’t like the idea of renovating and would rather buy new.
When renovating is out of the question, then buying a new home has many advantages. Buying a property in a growing area can bring capital growth and catching this growth early, such as when purchasing off the plan could potentially mean your property has gone up in value by the time settlement arrives.
Another advantage to buying a new property is that you know what the price will be and if buying off the plan, all the appliances and fixtures are all brand new and should involve little maintenance. It also means you can simply move straight in and enjoy the property without having to worry about any alterations.
Of course, there are hidden costs associated with buying a new property such as legal costs, conveyancing costs, agent fees, stamp duty, moving costs as well as building and pest inspection reports and you should bear this in mind as well.
At the end of the day, it is personal preference as to whether you decide to renovate or buy new, but you should do your due diligence and weigh up the pros and cons to both options before moving forward.
Published on 27th of March 2020 by Marty Stanowich