Which is best – renovate or buy?
October 10, 2012 20 Comments
Current buyers’ market conditions may be weakening, as a result of continued Reserve Bank interest rates cuts, but before making the decision to become a home owner or trade up, consider all your options carefully and make sure you are doing the right thing – it may prove prudent to renovate, says First National Real Estate Lakeshores principal, Mark Millington
“There is no doubt there are some great buying opportunities at the moment with low interest rates and steadying property prices, but for some, renovating may offer more benefits,” Mark Millington said.
“A granny flat, extension, or updating the home to the way you have always dreamed may be more cost effective and allow you to stay in the area you have come to love and appreciate.”
Mark Millington said there are myriad reasons why the current home may no longer be meeting the needs of the home owner including they need more space, their circumstances have changed or they just want a change of scenery.
“But whatever the reasons are, the ongoing uncertainty in domestic and international economies may make renovating more attractive, so my advice would be to weigh up the options, make a list of pro’s and con’s, and look at what your future needs might be,” Mark Millington said.
According to Mark Millington, the top things to consider are budget, location, time and space.
Budget: there are inherently costs associated with both options. Renovating is more susceptible to budget blowouts, but the hidden and add-on costs for buying a new home such as stamp duty, conveyancing and removalists can make it much more expensive. A careful and detailed budget plan will help you weigh up the costs involved in both options.
Location: consider whether you want to continue living in the area, or is there somewhere else you would prefer to call home? Also, take the neighbours into account. For many, relationships are forged with neighbours, and it is important whether you stay or move that you can see yourself getting along with your neighbours.
Time: what time constraints do you have? Finding the right property that will suit all your current and future needs will take time, as will renovating. Often, house-hunters are required to compromise in some way, but the home renovator should be able to do exactly as they set out to do and have had approved by the relevant authorities.
Space: make sure there is enough room to make the improvements you want, if you are looking to renovate. If you are going to buy, consider whether you will need to make any further alteration, either now to ensure the new property can accommodate your current needs, or some time in the future to adopt for your changing circumstances. Asking an architect or builder to inspect the property with you can be of enormous benefit.
“Also, if you are looking at renovating, it is easy to let emotions override practicalities, so it is important to make sure you get the right advice to ensure you don’t overcapitalise,” Mark Millington warned.
“A very basic rule of thumb when renovating is to never spend more than 25 per cent of the value of your home.
“But before any final decision is made, look at the real estate market and get an appraisal on your house and look at prices of houses that appeal to you.
“Even consider asking a First National Real Estate agent for advice. We can often help determine what the best choice is for you and your family by showing new properties and comparing them to what you love and dislike about your current home.”
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Issued by: First National Real Estate
or further information contact:
Mark Millington, Principal, First National Real Estate Lakeshores, on 0243591555