Upgrading your home: Buying vs renovating

Upgrading your home is both extremely exciting, and incredibly challenging. But what are the pros and cons of moving vs renovating? 

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If you and your family’s living circumstances have changed, and you need a house upgrade, one of the biggest questions is this; should you move or renovate? Living situations are dynamic and ever-evolving, so it makes sense to arm yourself with the right information before you jump into anything.

If your home no longer meets your needs, or those of your family, it’s time to consider whether splashing cash on a renovation will be the best option, or whether moving somewhere new might be of greater benefit.

What does the future hold for you?

One of the first things to think about when you start weighing up whether to move or renovate is predicting what the future holds for you. If you’re relatively young and thinking children might be on the cards in the next few years, are you going to need more space? On the opposite end of that, are your teenagers or young adults likely to move out from under your roof in the next couple of years, or are they in for the long haul? Or maybe you’re thinking about retiring and a significant downsize is on the horizon? These are all things you need to consider before making a final decision about getting your hands dirty with a renovation, or washing your hands of the place you’re currently in.

Consider whether your neighbourhood is right for you now, and in the future

It’s important to think about the future as well as right now. Look around your neighbourhood to see whether or not it’s going to suit your immediate needs, and your needs in the coming years. For example, if you’re thinking about having kids soon, or your kids are going to be moving from primary to high school or high school to university, are there schools or other educational facilities nearby? Similarly, if you’re thinking about retiring in the coming years, or if you’re older, are the right facilities close by so you’re not left stranded. Consider also, the layout of your house. If you’re thinking about getting pets, do you have ample space, or are your in-laws going to be able to make it down the stairs when they stop by for those “surprise” visits?

Avoid overcapitalising

Overcapitalising refers to overspending on your renovation, and can leave you significantly out of pocket at the end of it all. Essentially, overcapitalising is when you spend more money renovating and adding value to your home than you would receive from a sale in the near future. While overcapitalising can be an issue for those looking to renovate and sell soon after, it is less of a consideration if you’re renovating to live in the same house for a significant period of time. Nevertheless, if you predict you’re going to potentially overcapitalise on a renovation to suit your needs, it might be time to look elsewhere for a place to call home. Alternatively, ensure you only give your place just a little facelift.

Know the condition of your house before renovating

Often, couples or families looking to renovate older houses run into unexpected costs because they don’t consider the state of their building’s structure. Once all the furnishings have been stripped away, how do things look? Are there structural issues or is the plumbing and wiring going to cost more than you first anticipated? Ensure you get a proper quote from a number of sources when considering if a renovation is right for you, and if you do decide to renovate, ensure you have some cash set aside in case things go a little off course. If you need some help understanding what to spend and save on when renovating, don’t stress because Heritage has plenty of resources to assist you along the way.

Doing your research is key

At the end of the day, your decision to renovate or relocate should come from a base of solid research and investigation into what is going to be right for you. Investigating all manner of costs and personal circumstances are key to ensuring you make the right decision. If you’re considering your options and need some assistance from a financial standpoint, ensure you contact Heritage Bank who can refer you for a financial planning  consultation. 

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