Renovate or sell?

article header

The time comes in the life of many young families when they outgrow their home. That’s when the inevitable question rears its head: embark on a radical renovation or sell up and buy a new, more spacious home?

The decision comes down to two factors, according to architect Sam Crawford of Sam Crawford Architects – quantity versus quality. “Families generally consider renovating or moving when they need space,” he says. “Sometimes that is another bedroom or a second living room so the kids and parents can get away from each other.

“But when you drill down, it’s often better functioning spaces, spaces that are more comfortable, get winter sun, catch the breeze, are inexpensive to heat in winter, open to the backyard, or enable the parents to keep an eye on their young children playing without stepping on them. Often that does not involve more space but more intelligent use of space.”

The right kind of space

A bigger home – and a bigger mortgage – will not necessarily meet those needs, Crawford says. Buying a new, bigger house can sometimes buy you more “dumb space”.

“Dumb space is usually a large ill-defined living room that does not have a good connection to other rooms in the house or to the backyard, does not have good light or winter sun, has no outlook, is cold in winter and hot in summer,” he says.

What’s your budget?

Mary Anne Cronin, principal of Raine & Horne Bondi Beach, sees a lot of families facing the renovate-or-sell dilemma. Her advice is to consider the cost before making a decision.

“Renovation costs have blown out a lot,” she says. “People think they can get away with spending $100,000 on a renovation, but in most cases it’s around the $500,000 mark.”

Cronin relates the story of a client who bought a semi-detached home in Sydney’s seaside suburb of Bondi for $1.1 million and spent another $750,000 on an extensive renovation. The renovated home would not fetch $1.8 million on the market if the owner wanted to sell soon.

“It depends on your long-term view,” Cronin says. “If you’re staying there for many years and you are doing the renovation for your enjoyment, then it’s worth it.”

Before embarking on this life-changing journey, research all costs associated with renovations and selling and buying a new home, including comparing home loans to find one most suited to your needs.

Playing by the rules

If you decide to go down the renovation route, Crawford advises checking your local council’s regulations and approach to renovations before going ahead.

“It is worth asking an architect for advice if you are not sure,” he says. “Most architects will give you relatively inexpensive pre-purchase advice. A few hundred dollars spent pre-purchase could save you hundreds of thousands later.”

What’s your stress threshold?

Renovations can be incredibly stressful, so it’s worth honestly appraising whether you and your family are up for the challenge before getting started.

“There are always stresses. Choose the people you work with carefully,” advises Crawford. “Stresses can be minimised by going into the process knowing that things will come up that need to be dealt with in a balanced way. If you deal with people honestly and fairly, they will generally respond in kind. Builders and subcontractors are no different.”

Consider a mini-reno

Raine & Horne’s Cronin says there are bargains to be had in the middle of the market – homes that were renovated 20 or more years ago, and are therefore tired and dated, but have good structural bones. These types of homes can offer the space a growing family needs, and cost significantly less than a “renovator’s delight” – which appeals to people looking for a blank canvas – or a newly renovated home.

“There are opportunities to buy properties that were last renovated in the ’80s, so are quite daggy but the bones are good – then you can get away with spending $100,000 on cosmetic improvements,” Cronin says.

 

 

Advertisement

^Words such as "top", "best", "cheapest" or "lowest" are not a recommendation or rating of products. This page compares a range of products from selected providers and not all products or providers are included in the comparison. There is no such thing as a 'one- size-fits-all' financial product. The best loan, credit card, superannuation account or bank account for you might not be the best choice for someone else. Before selecting any financial product you should read the fine print carefully, including the product disclosure statement, fact sheet or terms and conditions document and obtain professional financial advice on whether a product is right for you and your finances.

Compare your product with the big 4 banks, or add more products to compare
As seen on