“Should I move house or renovate?”
It’s a question that has plagued many a discontent property owner. If your growing family is seeing your bathroom bust at the seams, or you’re simply not enjoying that ‘cottage-style’ kitchen you were so fond of when you bought the place, you may be considering selling up and moving on. Well, hold on there just a minute. Have you considered the cost of purchasing a new property versus the cost of a home renovation? Despite what you may think, renovation costs can be a great deal less than buying a new property, thanks to some sneaky little fees which creep up on many an unsuspecting home buyer such as:
- Stamp duty
- Agent fees
- Legal costs
- Loan fees
- Building and pest inspections
Not to mention the hidden foibles you may find in your new home, well after you’ve moved in. What many people don’t realise is that renovating can be a more affordable option than moving house. The stamp duty alone could cost you in excess of $10,000 – and that’s for a house worth half a million dollars. Check out this online calculator to give you an idea of the kinds of government fees you could be subject to, when purchasing.
These days, housing prices are skyrocketing. Property values in South East Queensland are pricing many first home buyers, and those wishing to upgrade, out of the market. If you already own a home, and find that it is no longer suiting your needs, you might consider sprucing it up with a home renovation.
The cost of a home renovation is less than you think
Of course, reality television will have you believe that to renovate your home involves tearing out the insides and starting from scratch. In most cases, nothing could be further from the truth. You may choose to overhaul your entire home—especially if your land is something you’d rather hang on to, but the house isn’t doing it justice—but full home renovation is certainly not the only option. For growing families, or singles and couples with changing needs, a renovation which targets key areas of concern (for example the bathroom or the kitchen) can be very affordable.
Noel Whittaker of Making Money Made Simple and many other titles says of buying versus renovating:
“My suggestion is to renovate if possible. Selling one home and buying another could cost you nearly 10 per cent of the price of the new home. If you sell a home for $600,000 and buy another for $900,000, you would be looking at close to $90,000 in expenses such as agent’s commission, legal fees and stamp duty, loan fees and removalist fees. That is a huge loss of capital.”
Hanging on to the capital you already have by renovating gives you the best bang for your buck. Check out this guide from realestate.com on the kinds of costs you may expect when renovating.
Home renovation adds value to your property
The biggest risk, according to Neil Whittaker is to overcapitalise on your home.
“This means you spend so much on your home that it becomes far more expensive than the rest of the houses in the street. You can avoid this by asking an agent to give you an appraisal of your home’s value to see how it compares with those around you. If its price today, plus the renovations, does not exceed the average price in the street, overcapitalising should not be a problem. Let’s assume your house is worth $600,000, and the average price in the street is $800,000: you could safely spend $200,000 in renovations. That’s just over double the non-productive costs of moving house.”
Clearly, renovating can not only address the needs of your family, but can also add real value to your biggest asset: your home.
Home renovation saves you time
It might sound crazy: having tradespeople in and out of your home, having your bathroom or kitchen out of action for a few weeks. But renovating your home can actually save you time, overall. Consider the time it takes to tackle the following when buying a new home:
- Talking to your bank or mortgage broker and securing pre-approval
- The application process for your home loan
- House hunting
- Attending countless auctions
- Putting in an offer, having to negotiate and waiting for acceptance of your offer
- The settlement process
- Moving house
- Putting your old home on the market
- Organising agents
- Waiting for a seller
- Waiting for settlement
A home renovation may only take a couple of weeks, depending on how much you decide to overhaul your existing property. If it’s simply your bathroom that needs an update, or perhaps just your kitchen that needs an overhaul, the cost of home renovation can be much more affordable than you realise, and certainly a great deal more affordable than buying a new home. At Intrend Bathrooms and Interiors, we cater to all renovations, great and small. Get in touch today to find out how much your home renovation might cost, and let us help you to transform your house today.