Renovate or move

If your housing situation needs a significant change, you’ll typically have two options to consider: do you renovate, or do you move?

There are various pros and cons for both, and the right answer for you will depend on why you’re needing to make a change and what it is you’re wanting to get out of your property.

Whatever your decision, it's important to note that there are significant costs associated with both options. 

Costs to consider

To help you understand exactly how much money you may need to fork out, we have unpacked the costs associated with renovating and moving.

Renovating costs

The first cost you may face is hiring a building inspector to check the state of your property and assess if any repairs must be made before renovating.

The next expense you will face includes the hiring of professionals, such as design consultants, structural engineers, builders, tradesmen and architects.

You will also need to factor in the costs of materials. It is worth noting that the ease of access to your property may have a direct impact on the amount of money you have to spend on tradespeople and materials.

The costs of the actual renovation will also need to be taken into consideration, including electrical rewiring, plumbing, painting, and any construction work. 

If you are refinancing your home to cover the costs of the renovation and need to borrow more than 80% of the value of your property, you may need to pay Lenders Mortgage Insurance.

Other miscellaneous costs involved with renovations are council fees, levies, permits, taxes and GST.


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Moving costs

Before you can buy a home and move into it, you may be forced to sell your current property. If that's the case, then you'll be expected to pay a specific amount of money to your chosen real estate agent. Agents typically charge a commission rate, which ranges between 1% and 3%, on the sale price of the property. 

Depending on the condition of your property, you may need to spend money on repairs or improvements before listing the home for sale. 

If you choose to sell your current home, you'll eventually have to clear your belongings out of the premise. To help with this process, you may decide to hire a removalist, which can cost up to $500 a day.

Of course, moving costs aren't the only expense, before buying a new home, you will need to conduct pest and building inspections to ensure your new property has no structural damage. Depending on which company you use, pest and building inspections can cost you as much as $500.

When you buy a property, you may need to pay stamp duty on the purchase. The amount you will need to pay will differ depending on where you buy and how much you spend. Your mortgage broker can tell you exactly how much your stamp duty fee will be.

When buying a home, you'll have to enlist the help of a solicitor or conveyancer. These legal fees can set you back anywhere between $1,000 and $3,000 – depending on the company you use.

When you buy property, you may need to take out a mortgage to finance the purchase. If this is the case, you may be required to pay a loan establishment fee. This fee will vary depending on the lender you choose.

During the settlement period, you'll be required to pay for title insurance to protect you from any claims made against the title of your property. In addition, you'll be required to pay to register your title with the state government.

Depending on how much you're borrowing, you may be required to pay Lenders Mortgage Insurance. This insurance protects your lender (not you) in the event that you default on your loan.

How can Mortgage Choice help?

While it’s ultimately your decision whether to renovate or move, it's always a good idea to have a good grasp of the costs associated with both options before making your final decision. 

At the end of the day, it's important that you make the right life and financial choice for your future - and at Mortgage Choice, our local brokers are here to help provide you with the expert advice you need to get you started on your journey.

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Posted in: Renovating