Renovate or Relocate? Why Upgrading Your Home Can Be the Smarter Choice

There are numerous reasons why you might consider renovating.

Whilst there has been an increase in the volume of properties coming onto the market, the entry and exit costs make buying and selling an expensive exercise. For example, in South Australia, these coasts are often a minimum of five per cent of the property’s value. Even if you find a property in the right location, the house does not always have exactly what you need or may not be in the best condition, requiring a new kitchen or bathroom, for example.

The good news is that trades, while still busy from the COVID bubble, are now more available, and materials are more readily accessible. That said, the cost to replace a kitchen or bathroom is significantly higher than it was five years ago.

Aside from the cost of moving, there are other reasons why you might choose to stay and renovate. These include living in a good location, having friendly neighbours, being close to services, and residing in a particular school catchment zone. This is why I chose to pursue the extension/renovation path. I can get the floor plan, kitchen, and bathroom features I want, rather than trying to find another house in a different location and then having to spend money on it.

There is a difference between extending and renovating. Extending involves expanding the footprint of the dwelling, whereas renovating involves improving components within the existing structure. Lenders have different requirements for this, and the process for securing renovation finance, such as renovating a kitchen or bathroom, can be far more straightforward than the process for obtaining a loan to extend your home.

If you are looking to sell, you can even undertake a minor renovation to maximise the sale price. This can involve replacing floor coverings, painting both the interior and exterior, or even changing a toilet cistern and tapware, among other smaller, less costly items, to assist in maximising the end figure.

While the kitchen and bathroom are often among the costliest upgrades, renovating these spaces can greatly increase a property’s value. This is because buyers can move in without the hassle, time, and expense of organising the work themselves.

It’s also crucial to consider the likely buyer when updating a home. Although you’ll be renovating to suit your personal needs, being too unique in your taste might turn some buyers away, reducing the potential buyer pool and lowering the sale price. It pays to stay informed about current trends and market expectations.

Most importantly, be mindful of your budget. If you are concerned about overcapitalising, you can always seek advice from a property valuer about the end value of the home once all works are completed.