Renovate your current home or sell it and upgrade: Which is right for you?

Life can change quickly, and so too can our needs and wants from the place we call home. But if there are aspects of your current property that you still enjoy, from its character or size to the location, it might be worth undertaking a renovation so it’s fit for purpose. But there are pros and cons to this approach.

Stay where you love: If you’re attached to your neighborhood, have great schools nearby, or love the sense of community your suburb provides, renovating means you get to stay put while enhancing the home you live in.

Make it your own: When you take on a renovation, you can make the home exactly what you want it to be – within your budget, of course. But perhaps you can write a wishlist of features and make them a reality, versus buying an upgrader that might not be exactly what you want.

Adding real value: A clever renovation that both meets your needs and wants while adding value to the property could see you have your cake and eat it too. A new kitchen or bathroom, and even the addition of a bedroom via a revised and more efficient floorplan, could dramatically boost its equity.

The cost of staying: When you sell a property and buy a new one, there are a whole host of expenses. You’ll pay the agent a commission and require a lawyer as a vendor, while you’ll be pinged with stamp duty when you buy. There are also mortgage break costs, followed by establishment fees on the other side.

The power of attachment: Sometimes the place we live holds special emotional value. It might be the place you raised your kids, or your very first property with your partner. That sentimentality can often be hard to break. If you renovate, you don’t have to.

Cons of renovating your current home

Taking on a major renovation project is a complex and expensive endeavour at the best of times. But in this current environment, where interest rates are high and the costs of trades, materials and construction are high, not to mention the availability of each, what seems straightforward could spiral into a never-ending money pit.

Budget overruns: Even when market conditions are ideal, it’s easy for a reno budget to quickly run over. Ask anyone – there are almost always unexpected costs. But these days, everything costs more, from building materials to the tradies themselves.

Chances of delays: Getting a tradie to even come and quote might be near impossible in many cases. There simply aren’t enough professionals to go around. As a result, there’s a hefty premium attached to some of the most sought-after specialties. Those doing a reno at the moment can almost guarantee there’ll be delays involved. What one took a few weeks might now take months. Those delays aren’t just frustrating – they cost you.

Stress and disruption: Taking on a reno project isn’t for the fainthearted. It’s stressful, nerve-wracking and plagued by uncertainty. Worse, if you’re staying in the property while works are ongoing, expect plenty of noise and dust. If things don’t go to plan, the stress levels can rise pretty high. If you’re juggling kids and a job throughout this, there will be a toll.

Limits of the existing home: Unless you’re taking on major structural works, such as a partial knockdown and rebuild or an extension, you might be pretty limited in what you can realistically achieve. It might be that the size or layout prevent you from getting what you hope for, defeating the entire point of renovating in the first place.

Financing challenges: Can you actually afford the works? How are you accessing the capital needed? Do you have a financial buffer built in should the job go over budget or over time, or both? Regardless of the scale, there are some important financial plans to be devised. Talk to us about how we can help.

Pros of renovating your current home

Selling your home and moving on to something that’s more suitable, meets your needs and ticks most – or all – of your wishlist items, is an appealing notion. It’s a fresh start that comes with new possibilities and space to grow. It’s especially enticing if you’re not keen on the time and cost involved with a renovation project.

A new start: Selling and upgrading offers a clean slate and a new beginning. You get to shop around for a property that has the features, layout and opportunities that better align with your current lifestyle – and possibly with your future plans.

Space and modcons: Upgrading offers the opportunity to really prioritise your needs and wants. It might be an extra bedroom, or a master bedroom with an ensuite. It could be a bigger kitchen with plenty of space and modern appliances. It might be outdoor space with lots of room to kick a footy around or plant a garden. It could be second living areas, media rooms, guest suites or a walk-in wardrobe. It might even be modern technology, like home automation or cinema and surround sound gadgets.

Much more straightforward: There’s no denying that selling, buying and moving are stressful tasks in themselves. But perhaps upgrading is faster, cheaper and less intrusive than a renovation project. 

Potential for growth: Selling and upgrading to a better home or a better location – or both – gives you the chance to position yourself for strong long-term capital growth.

Cons of selling and upgrading

Breaking up is hard to do, and it might be that there are still elements of your current home that you love. Moving on can be tough. It’s also not cheap – and in some cases, could be costlier than staying put and renovating. And it’s stressful to boot.

High transaction costs: When you sell your home, there are a whole host of expenses to keep in mind. You’ll pay your agent a percentage of the sale price as a commission. You’ll need a lawyer. there will be costs involved with paying down and discharging your mortgage. And then there’s the cost of physically packing up and moving. Chances are, that’ll add up to tens of thousands of dollars.

Realities of the market: Depending on where you live in Australia, you could find yourself selling in a buyer’s market. That is, demand for homes is lower than the supply of available properties, and as such, there’s less competition. You could encounter delays in finding a new owner, pressures on the price you want to achieve, and lots of protracted back-and-forth negotiations. On the other hand, it could be that it’s a hot seller’s market and you find a buyer really quickly who’s willing to pay handsomely. That’s great news! But keep in mind, this is the exact market you’ll soon find yourself shopping in. The market you sell in is the one you upgrade in.

Emotional toll: Selling, buying and moving are some of life’s most stressful endeavours. They take time, come with a fair amount of pressure, and cost lots. It can also be tough to say goodbye to a home or a neighbourhood you’ve come to love.

Big money requirements: Upgrading tends to mean you’re asking a bank to lend you more money that you’ve borrowed in the past. And anyone who’s owned property knows how tough it can be dealing with banks. You’ll have to hump through lots of hoops. Talk to us about ways to minimise the stress and hassle as much as possible.

Whether you’re renovating or selling and upgrading, we can help guide you through the financial requirements and make the process as stress- and hassle-free as possible. Talk to us about your options.