Is it worth it?
The decision of whether to renovate or move house can be a difficult one because both can incur significant expenses, as well as offer the opportunity to improve the value of your assets.
On the plus side:
- For an average home, the total costs of moving – including stamp duty, agent fees, lawyers and moving costs can be a little expensive. If your main reason to move is the need for an extra bedroom or more living space, it may be more cost effective to build on.
- Renovations are also a good idea when they fit onto your existing home relatively cheaply – such as turning a back verandah into a living room.
- Many smart home renovators have achieved dramatic profits by overhauling run down, undesirable properties and selling them again two or three years later.
On the minus side:
- There is a danger of ‘over capitalising’ on your home. In other words, if you are faced with spending money on your property which won’t increase its resale value, consider moving to a more expensive home. This may be the case if your intended renovations are expensive to add on to your present home (for instance, if you require major earthmoving).
- It is not a good idea to try to ‘make your home something it’s not.’ Renovations which suit the period of your home may well increase its value, but renovations which look too modern (or cheap!) could also turn off prospective buyers. Remember also that prospective buyers often pay a premium for the potential they can see in a ‘renovator’s delight’.