It’s little wonder that now more than ever, we want our house to feel more like home, given we are spending more time there. After all, you want to feel good about where you spend most of your time.
Is it time to upgrade your home?
Perhaps we have a growing family, the need for a spare room to work from home, a need to look after elderly relatives, a home gym or an extra living room for growing teenagers. We all face these crucial decisions in our lifetime.
Should you stay or should you go?
So, you happen to be in a good financial position or have some equity in your current home and feel it’s time to create (or buy) your dream home, but how do you make the decision between renovation or relocation? By weighing up the pros and cons of course. But the first critical step is to set your goals.
We coach our clients to think of property as a long-term strategy (unless of course your strategy is to ‘flip’ properties for a profit – but that is another topic!).
Ask yourself…
- Where do you want to be in five or 10 years’ time?
- Do you want to live near family, friends or work?
- Will your family grow in the future?
- What are your future work and income possibilities?
Are you already in your dream location or could you afford to move to a more premium location or property?
Whether you are buying for capital growth in the future, or perhaps lifestyle and convenience are more important to you, it is essential you make your decisions for the right reasons.
Setting out your future home musthaves versus nice-to-haves can help you decide if you can achieve these in your current home or if in fact it’s time to move on. Considering the pros and cons of both options will help you make your decision.
To renovate or relocate
Pros
The pros for renovating are:
- the opportunity to plan a renovation that will be specifically tailored to your family’s needs
- at the end of the renovation, you’ll have that brand new feeling and associated warranties
Buying a new home means
- avoiding the chaos of living through the building works of a major renovation
- the opportunity to move to a more premium property or closer to a preferred lifestyle, family or friends
Cons
The downside to renovating is:
- living in a construction zone for weeks, possibly months
- needing to move out temporarily while renovations are completed, potentially spending money on rent
- potentially being overwhelmed by the number of decisions that come with a renovation
- the possibility of overcapitalising on the renovation – where the cost of the renovations could far exceed the added value to the property
- budget blow outs that can materialise with renovations – you don’t know what you might find until you start digging or tearing up boards
The cons of buying a new home:
- selling and buying a new home involve a raft of buying and selling fees including stamp duty, real estate agent commission, marketing fees, building and pest inspections, moving costs and conveyancer fees to name a few
- buying a new home can be stressful, especially if you need to sell your existing home. Finding the right home, location, finance and moving can be stressful. Well not the finance – we can help take that worry away!
There is yet a third option… turn your home into an investment.
If you’re lucky enough to be in the position of affording to keep your current home by utilising your existing equity and new borrowings to purchase an additional home to live in, you could be setting yourself up financially for the future.
Over the longer term both could potentially increase in value and grow your wealth. Additionally, the rental income from your investment property will help pay your mortgages.
Don’t be overwhelmed by all your choices. We are here to help step you through the process. Before you make the decision to buy, renovate or buy an additional home, it is important to know your financial position and borrowing power. We can present the various options to suit your needs.