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Renovate or relocate?

By Catalina Belu

When your kids are demanding their own bedrooms, that old-fashioned kitchen is getting on your nerves or your house needs a major overhaul a difficult decision awaits: to renovate or relocate.

Renovating an existing home offers to chance to create the house you want in the location you know and love.  It avoids upheavals such as changing children’s schools or settling into a new community.  But the difficulties are obvious: the disruption to lives, the need to temporarily rent or live in a building site, the expense and potential for cost overruns, the work involved in planning permissions, design and project management.

Buying a new home may seem easier.  But it brings its own challenges, not least of which is finding the home you want in the location you want.  As well, it entails selling your existing home for the right price and coordinating moving from one to the other, preferably without renting in the interim.

It’s a tough choice, and one of those occasions when making lists of pros, cons and priorities can help.

Start by asking yourself what you want most: is it to stay in your existing location?  Is it to live in a home which meets all your requirements and fulfils that wish list you have been compiling for all those years you have settled for second best?

If the answer to those questions is yes, ask yourself whether all the downsides of a major renovation, from potentially months with no kitchen and/or bathroom to choosing everything from light fittings to drawer handles are worth it to achieve your location and dream home goals.

If you decide that the end result is worth it, start interviewing architects to obtain ballpark figures for your renovation and ensure that what you want is achievable with the funds you have.  And thoroughly analyse your finances, including meeting your bank manager and accountant, to ensure you can raise those funds, plus contingency.

It is also time to talk to a local estate agent to ensure you will not be overcapitalising your home.  If the cost of your renovation will take the amount spent on your home above the ceiling price for homes in your area it may be time to rethink.  Even if you plan to stay long-term, so assume you will eventually be in profit, overcapitalising is not a good idea. Sometimes selling unexpectedly is necessary and if the house is overcapitalised .  You may lose money.

If you decide the upheaval of a renovation is not justified, or are undecided about it, an estate agent can help.  Have your home appraised – is the amount it is likely to sell for enough to buy the home you want?  What are the chances you will be able to buy the home you want for the amount you will have in the area you want?

There are many important questions to be asked and answered.  Weigh all the factors involved, decide your priorities, draw on the professionals for advice and talk to friends and family who have renovated about what was involved.

Source: http://reiv.com.au/

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