Your house may be bursting at the seams, or it might be in urgent need of an upgrade. If you’re at the point where your home no longer meets your needs, you face one of life’s big decisions: to renovate or relocate?
Your current and future needs
Be clear about where you’re at now, and where you plan to be in five or ten years’ time. Map out the ‘must-haves’ for your dream home versus the ‘nice-to-haves’. You might urgently need a second bathroom for your teenage children, but bi-fold doors opening onto a raised terrace might be a lower priority.
The condition of your house
Without careful assessment of older homes, what starts as a simple renovation could end up being a very costly and time consuming project. If you’re considering a renovation, it’s important to look beyond the floor plan and ask an expert to assess all the hidden elements like the wiring and plumbing.
Put simply, overcapitalizing is where you spend more money on your home than you are likely to recoup if you had to sell it tomorrow. Say you bought your house for $300,000 and then spent $150,000 renovating it. If the median price for similar houses in your area is only $400,000 and you have to sell for whatever reason, you could be out of pocket $50,000. Overcapitalising isn’t so much of an issue of you plan to live in your renovated house long term.
You should compare the benefits of remaining where you area versus moving to a new street or suburb. Often the decision comes down to whether it’s easier to buy a new house that meets most of your needs – if not all of them – or to remodel your own home to your exact specifications.
Do your research and ask the experts
Remember, it’s important to speak to the experts, get detailed costing information (always get more than one quote for the job) and get referrals or references from trusted sources.