So, you’re stuck in a rock and a hard place, not knowing exactly which direction to take. The dilemma? You’ve outgrown (or outdated) your current property, but you’re not sure whether to renovate or buy instead.
There’s a list of things going through your head, and you don’t know which is best for you. Maybe you adore your house, but it has become too cramped for your big family. Perhaps you want to buy a new house, but you have amazing neighbours you would not trade for the world. Or maybe you’d love to move to a new home, but not sure if the financials stack up.
Whatever your situations, chances are that if you have these thoughts, you’ve outgrown your home and something needs to be done. So, here’s a rundown of the things to consider to help you make the right decision for you.
Do I renovate or move?
Both options have their fair share of advantages and disadvantages, but the ideal answer really depends on your life, way of living, wants, and life circumstances.
For example, if you want to monitor an on-going project, love to be hands-on and have the time to be an active part of a home reno, then renovating your current house could be a great decision. However, if you are busy with work, family or life, thereby lacking time to go through a remodel, maybe buying a new home sounds like a better option.
Deciding whether to renovate your current home or move to a bigger place can be tough, and there are advantages and disadvantages to each.
Pros & cons of renovating
Those who are eager to solve their house dilemmas but have a limited budget usually prefer to renovate for various reasons.
For one thing, improving your current home gives you the liberty to design your home the way you want it to be, with the guidelines you set. Also, renovating does not necessarily require you to do it all at one go, meaning you can help spread the cost and work over time.
However, as with every option, budget is a crucial factor in a renovation and for minor additions or changes, it can be cheaper than buying a new home, however, for more extensive renovations, the costs can be on par.
And when budgeting, remember to add some ‘wiggle room’. Renovation usually ends up more expensive than initially planned due to unexpected and undetected issues that were not factored in (think things like faulty electricals and rotten floorboards).
Alongside this, renovations can also be time-consuming, disruptive, and noisy. You may even need to temporarily relocate while the work is being done.
Pros & cons of buying
Buying a new house can often sound like the most convenient choice. After all, you just have to tell your real estate agent what kind of home you like, where you want it to be, and that’s it—you got a new house without even grabbing a shovel!
Purchasing a house and moving rather than renovating also allows you to declutter and discard anything that does not spark joy anymore. That way, you can move into your new place with a lighter load.
However, this choice is one that also has things to consider. If you are buying a home rather than renovating, it could be pricier than renovating depending on your purchase price vs projected renovation costs.
You also need to factor in selling the home you are in now, new loan application fees and moving expenses, among other things.
Also, should you decide to buy a new house before putting your old home on sale, you may be required to take out a bridging loan to sustain you and your family.
Is it better to renovate or build a new home?
Costs of a new home vs renovation vs new construction
The cost of each option depends on the scale of the works. But there is no need to worry—the following information will give you an idea of what you can expect the pay for each option.
According to the REIQ, the median price to purchase an established property in Queensland is $645,000. On the other hand, in the Renovations Roundup report from Housing Industry Association (HIA), more than half of the renovations in Australia cost between $40,000 and $300,000.
The price of constructing a new home is in an entirely different scale and depends on its size. A basic home with 3-4 bedrooms is priced from $200,000, a standard home costs between $250,000 - $450,000, and a high-end home is priced between $450,000 - $800,000.
When is a knock-down rebuild worth it?
Renovating or buying a new home aren’t only the options out there. In fact, you can consider demolishing your house to make way for a new one on the existing site.
A knock-down rebuild may even yield better results in the long run. You can stay in the same neighbourhood, still enjoy your favourite nearby coffee shop, but with new everything—walls, floors, furniture, and more! However, it can be costly and time-consuming, and you are expected to temporarily relocate somewhere.
As you can see, each option has its pros and cons, which is why it’s challenging to choose what’s right for you. But at the end of the day, the right decision will depend on your personal needs, desires, and financial situation.
If you’re stuck, consider consulting a real estate expert who can help you make smarter decisions for your home.