August 03, 2016
People often outgrow their home as their family grows, needs change or they gain more equity to play with.
But with property prices at all-time highs and interest rates hovering at all-time lows, you may be questioning whether now is the best time to sell and upgrade into a bigger home, or renovate your existing abode.
Before making any major financial decisions, it’s important to weigh up the costs and benefits of both options and determine which choice might be right for you and your financial situation.
The condition of your current home
Can your home withstand renovations or is it too old for the task? Does your current home have the right structure and land space needed to complete your dream renovations, or would you be limited in what you can do?
Does your local council have any concerns about potential renovations or are you free to do as you please? For example, some homes will be classified as ‘heritage listed’ by their local councils, which means home owners are often not allowed to change the home’s façade.
Weigh up the costs
It’s important to understand exactly what renovations you want to make and how much it may cost. It’s also important to factor some fat into any ‘renovation budget’ as costs will often blow out during the renovation process. Take a look at our renovation tips from Caro,The Block’s Budget Queen.
Keep in mind that purchasing a new house can be just as expensive a process once you have accounted for extras like stamp duty, legal fees etc.
Assessing your current and future needs
Assessing your current and future needs both financially and physically is crucial in determining which option is best for you. Consider how long you intend to stay in your home and whether the possibility of downsizing will arise sooner rather than later.
Also, it pays to look at how long any renovations may take and what impact they would/could have on your living arrangements.
If you’re ready for a change, I can help you understand how much you can borrow, which could help you to determine which option – renovating or upgrading – is the best for you financially.
By knowing what you want, how much money you have to spend, and what your future property goals are, you can make the right decision when it comes to upgrading versus renovating.