One of the big questions all families will face sooner or later is “Should we renovate / extend OR should we sell and move”? There are a number of considerations that you should look at when answering this question and we will try to cover some of the important points in this article.
You Can Add Value to your Existing Home
An extra bedroom is an obvious choice as this can add considerable value. Also, the old saying that kitchens and bathroom sell houses is true. Substantial added value can be gained by renovating your kitchen and bathrooms.
Some older homes lack functional space like a family or rumpus room so this can also be a good option.
You Love Your Home and Your Location
If you love the home you’re in but have just outgrown it, then an extension may be the answer. You may not want to disturb your children’s schooling especially if the school they’re in has a great reputation and good student results. Or you may have built good relationships with your neighbours and local friends that you just don’t want to lose. Whatever the motivation, there may be some good reasons to extend or renovate your home rather than move.
Avoid the Stress of Moving
Although getting a new home is exciting, some people find the stress and hassle of moving may be outweighed by doing a renovation. This is especially true if you have been in your home for a long time and have a lot of stuff to pack and move, Although, this is sometimes a good time to get rid of junk and unused stuff. Moving also comes with substantial costs.
Avoid the Additional Costs Like Stamp Duty
There are substantial costs associated with selling your home and buying another one. Not only will you need to pay real estate agent commissions and marketing costs to sell, you will also need to pay stamp duty, transfer fees, legal fees etc on the new home. These costs add up to tens of thousands of dollars. If a renovation or extension will give you the result you need, then your could avoid these additional costs.
Easier to Rent Out in Future
Renovating or extending your home may add more appeal to help attract higher quality tenants should you decide to rent out your house in years to come. This can also increase rental yield which can make your investment give you a higher return.
Design it just the way you want it
Get your artistic flair going and design the changes in your home just how you want them. When moving to another house, you often make compromises. However, when you design the extension or renovation yourself, you can get the style and function that suits your family.
Things to Consider Before Renovating or Extending
- If you are not happy with your current location, or are not happy with the home or neighbourhood, then no amount of renovation is going to make you like it
- Make sure you understand the costs well. So many renovations can go terribly wrong because of cost overruns. Don’t underestimate and get complete written fixed price quotes from tradespeople and builders
- Living amongst a renovation or extension can put a lot of strain on family harmony. You may need to move out temporarily so you have to take the cost of alternative accommodation into consideration
- Will the money you spend on the renovation outweigh the end value it will add to your home? It may be that your dream or ideas may cost too much and you could be over-capitalizing if you carried out the work. Remember that the renovation or extension needs to fit the demographic you are in.
Funding your Renovation or Extension
Once you have decided that a renovation or extension is right for you, there are a few options to fund the work to be done. You options include
- Saving the whole amount
- Refinancing your existing home loan to a new one could give you some additional features that better suit your circumstances
- Topping up your existing loan
- Redrawing equity you have built up in your loan
- Taking a personal loan for the amount needed