August 05, 2015
Whether your family is growing or your home is looking tired, there are a number of reasons why you may be dreaming of greener pastures.
When your home no longer meets your needs, you should consider whether it’s in your best interest to renovate or sell your home and move on to something more suitable.
Renovating lets you create your home just the way you want it, which can be a great option if you love the area you live in. But it can be stressful.
Moving can also be disruptive if you can’t find something you like in the area you want to live in. But it gives you an opportunity to look for a home that meets your needs, without you having to renovate and worry about overcapitalising.
What to expect when you renovate
Renovating can add value to your home and let you build upon the foundations of a property you already love.
Before renovating, speak with industry experts such as builders, real estate agents, property inspectors and architects (depending on the scale of your proposed renovation). They’ll be able to tell you what is and isn’t possible and help you to work out your costs.
After speaking with these professionals, weigh up the following:
- How much will the renovation cost and does this fit within your budget?
- Will it add value to your property or overcaptialise?
- How much disruption will it impose on your lifestyle?
Renovating can be stressful and disruptive to your lifestyle, especially if you need to move out for a period of the construction. Make sure you are up for project managing tradesmen and inconveniences like spending your weekends working on the house and using a neighbour’s bathroom when yours is out of action.
Costs of renovating
According to Ask an Architect, the cost of renovating internally ranges from $600/sq m to $2,700/sq m. Extensions on the ground floor can cost from $1,900/sq m to $3,400/sq m, with first floor and wet area extensions costing more.
Specific costs you can expect:
- Builders and tradesmen
- Permits and council fees
- Construction materials
- Architect or draftsman fees
- Accommodation (if you need to move out)
- Furniture storage
What to expect when you sell
Selling your home and moving to a more suitable property allows you to sidestep the whole renovation process, but is still a big commitment.
You need to invest your time into researching properties, attending inspections and eventually moving everything to the new property. You will also need to make your current home available for open homes.
Before you start looking for a new home, work out what you can afford. Have your home appraised so you know what it’s worth and then speak with your lender or mortgage broker about your finance options. If you want to upgrade to a larger or more modern home, it’s likely that you’ll need to use equity to borrow more.
When selling your home, ask yourself the following questions:
- What is the current market like?
- What is my home worth?
- Can I afford the home I want in the area I want to live in?
- What do I need to do to my home to get it ready for sale?
- How long will it take my home to sell?
- Will I need to rent between selling my home and purchasing another?
If you are selling because you have already made an offer on another home, you need to be confident that your current home will sell before settlement, otherwise you’ll need a bridging loan.
Costs of moving
- Stamp duty
- Real estate agent fees
- Refinancing costs
- Building and pest inspections
- Removal costs
What is best for you?
To make an informed decision, speak to as many people as possible. You may find that your renovation plans are easier or more complex than you thought. Or you could discover that your home is worth more than expected, in which case it could be in your best interests to sell.
These factors, as well as your budget and lifestyle, will help you determine which course of action is best for you.
Whether you are renovating or moving, it’s likely you’ll need to top-up your loan to cover the costs. Call me to see what you can afford.
0419 733 862
Your Garden City Mortgage Broker, Brisbane