Should I renovate or sell? Which is right for you?
If you’ve been thinking of making a change with your living situation, deciding whether to sell or renovate your home is a tough question and shouldn’t be something that you rush into when working out what’s right for you.
Finances, lifestyle, work life, family needs and goals, as well as expanding families, are all good reasons to take stock of your current living situation and make a plan for the future.
When deciding whether you should stay and renovate your current home, or consider selling and buying something new, you should take the time to run through all of the options, pros and cons and associated costs.
To help you make an informed decision, weigh up all of the factors and figure out what’s best for you, here are all of the common questions answered for you.
What is your available budget for renovating?
When it comes to deciding whether to sell or renovate, there are likely going to be a few factors at play. Many people – especially families – tend to feel connected to their homes because of the memories and sentimental value and this might sway one to instantly want to stay and renovate rather than buy something new.
To help you make the decision, you need to weigh up a few things. Firstly, you need to consider what your budget to renovate is and work out how much you’ll be able to spend.
Then you need to look at the likely cost of renovating. Taking into account your location, the cost of tradespeople, permits and the average costs of building, spend some time really figuring out how much you’ll be in for if you want to renovate rather than move.
Often, it can work out to be more expensive to renovate than it would be be to sell and buy something else.
This could most definitely be the case if your current home needs a lot of work. Older homes and those needing repairs are likely going to require a big cash injection above and beyond the average cost of renovating.
Some older houses can be costly to renovate.
Consider the equity you have on your current house -
When deciding whether it’s best to sell or renovate, you should consider the equity you have on your current house.
If you have equity in your property but don’t want to sell, could you consider using it to buy your next home while keeping your old place as an investment?
Turning your current home into an investment means you can spend time letting it appreciate. This would also mean you could benefit from any capital gains if the market improves in the mid- to long-term. A benefit you won’t reap if you sell to buy now.
On the other hand, if you stay and renovate, this can be an effective way to increase the value of your home and sell it for a larger profit later down the track.
Either way, it’s important to look at your finances and a budget for both renovating and what you could afford if you were to sell up and buy.
While it can be hard to estimate the exact costs associated with both, getting clear on the picture of both scenarios will help you stay on track.
You many find you are able to use existing equity in your house to cover the cost of renovating so then this would be a good option if you want to stay put.
Is your council open to renovations?
Considering council permits and approvals is another big factor when deciding whether to renovate or move.
Apart from the costs involved when engaging with experts for plans, sometimes you also need to get permits and council approvals, which can be costly and, at times, a very time-consuming process. In some cases it can take years, by the time everything passes through for approval to when you can commence building and complete the project.
When taking this into consideration, for some people it might be best to consider selling and buying new.
Depending on your property type and the renovations you are planning, you may need council approval. You will need to check the guidance in your council and state areas as they vary. At a minimum, you will usually need a planning and building permit.
The earlier you look into this and get the ball rolling the better, as some council approvals have been known to take some time.
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