It is one of the toughest decisions to make: Sell and upsize or renovate your existing home. Growing families who are weighing up their options must consider all factors before committing to a potentially stressful and expensive journey.
For some, moving into a new house may be a desirable approach without the pressures and disruptions of a renovation. For others, the challenge, freedom and sense of creativity is more appealing when choosing to renovate. Either way a well-researched plan detailing the financial outlay and lifestyle needs is fundamental to achieve a successful outcome.
Prior to committing to a renovation, you need to consider if the condition of your existing property is capable of the upgrade. Some houses are heritage listed which prevents certain areas of the property from being altered. This overlay is set and reviewed by the local council and therefore owners are restricted in what can and can’t be changed. The other obvious consideration when choosing to renovate are the disruptions and possible costs of moving temporarily to a rental property. This can not only add stress and inconvenience but also increase costs in leasing and the cost of multiple moves.
Another risk is the danger of ‘over-capitalising’ where you spend more money on renovations than what the property is actually worth. Avoiding this by researching similar properties within your area will provide you with the necessary framework to plan and avoid this situation.
Renovating can however be a cheaper option and exciting challenge. Avoiding the costs of selling and purchasing is a major drawcard so long as the house does possess the qualities to be improved and will sustain your family’s needs for the long term.
The key questions to ask if you choose to renovate;
- Are you going to achieve an outcome that is financially worthwhile?
- Functionally are you going to achieve an improvement on the existing situation?
- What level of disruption may occur?
- Does your house have the capacity to be renovated?
Being aware of what you can spend and what should be spent are two different questions. It can be very easy for a budget to be blown out when planning for a renovation so financial discipline must be applied and the opinion of different personnel.
Selling and moving does come with a huge financial outlay but for some the commitment may save the dramas involved with a renovation. If you were to sell a home for $700,000 and buy another for $1,000,000 then roughly it could cost you 10% of the newly purchased price. With an estimate of $90,000 – $100,000 of fees including stamp duty, legal fees, agent commission fees, loan fees and removalist fees then you need to consider if this outlay fits the current situation. The price of selling up, improving your current family needs and requirements and the style of property required are all fundamental questions should this route be taken.
Renovating or moving is a complex decision however a thorough plan outlining the risks vs benefits should be considered in depth. Aside from the numbers, the emotional attachment to stay in the existing location or move to a new area with different amenities may be the underlying question. Understanding all costs involved and exploring all options will dictate future property and family goals so ensure the decision taken meets your criteria.