Thinking of a change: Should you renovate or relocate?
Every year, over half a million Australians buy a new property, and last year over 8million of us did some form of renovations, Reserve Bank and Roy Morgan research shows.
When your property’s no longer making the grade, you’ve got a decision to make. Are you going to relocate or renovate?
Renovate: Tips and traps
Every year over half a million Australians buy a new property, and last year over 8 million of us did some form of renovations.
Before you renovate, you should always get a building inspection. If your inspector notices signs of mould, structural decay or other serious issues, then it’s possible that renovating isn’t the right choice.
That’s because if your home has those serious problems, renovating could fast become a costly exercise. Furthermore, if you’re not happy with the location of your property, or the block of land it’s on, renovating obviously isn’t going to solve that problem.
Before you start, remember, your renovations aren’t just about your tastes and preferences. You should always keep in mind that one day in the future, you will most likely sell your property and move on, and any changes you make could greatly affect the sale price.
For example, if you’re living in a family orientated area, an extra room may increase your home’s value, whereas if you’re in an area occupied by young professionals it may not. If you’re unsure, ask a local real estate agent in for help.
Renovate: The Costs
You should never make a decision without first knowing all the details, including the costs involved. So with the help of the 2016 Archicentre Coast Guide, we’ve put together a few examples of likely renovating costs:
- New bathroom or ensuite: $10,000 to $25,000.
- New kitchen: $12,000 TO $30,000.
- New laundry: $5,000 to $10,000.
- New rooms and add-ons: $1,900 to $3,400/m2
- Painting exterior brick in good condition: $15 to $45/m2
- Painting interior: $8 to $25/m2
- Possible accommodation costs during renovations.
When you start making changes it’s essential that you don’t overcapitalise (which is when the cost of your renovations is higher than the amount of value added to your home.)
The more you know the better your choice will be, so take your time and get all the expert advice you can.
It can be hard to know where the line is, so make sure you consider the market you’re renovating for, as well as the features of similar properties in your area before making any decisions.
Relocate: Must knows and how-tos
A poor location, awful neighbours, small block-size, structural problems and itchy feet.
These are all problems that renovations may not be able to solve, so if you identified with any of these your best option may be to buy a new home and relocate. Keep in mind though, that doing so can be time consuming and expensive.
When searching for a new home you have to look closely at every feature of each property and whether or not it’s suitable. Consider the following:
- Location: is the property somewhere you want to live? Is it close to transport, work, school family friends?
- Pricing: decide on a budget and consider whether homes in the area are affordable.
- Building: is the building structurally sound and is there any sign of termites? It’s always a smart idea to get building and pest reports.
- Lighting: is the building north facing? Does it have good natural light year round?
- Neighbourhood: what are noise levels like and what’s in the area? Is the suburb safe?
- Future: are there any developments planned nearby in future that could affect your property or its neighbourhood?
Every home buyer is different, so you’ll most likely have your own conditions – perhaps an extra rooms for new family members in future, or plenty of off-street parking. Whatever you’re looking for, make sure you clearly list it before you start searching, so that you don’t waste your time.
Relocate: The Costs
Buying property costs so much more than the sale price. So before you start throwing your hand up at auctions all over town, consider the following extra expenses of buying a home:
- Stamp duty: depends on your location, situation and house price but could be over $10,000.
- One-off mortgage fees: could be as much as $6,533, according to a YourMortgage estimate.
- Moving costs: between $550 and $3,500, according to the NSW government’s Guide to the Cost of Home Purchase.
- Conveyancing fees: $900 to $2,200, according to the Australian Institute of Conveyancers.
- Building inspections: Home Improvement Pages estimates this could set you back between $200 and $1,000, depending on the size of your property and its location.
As you can see, you’ve got quite a complex decision to make. The more you know the better your choice will be, so take your time, get all the expert advice you can and you’ll be far better off as a result.