RENOVATE OR REBUILD – WHICH IS RIGHT FOR YOU?
It is a common dilemma.
You’ve outgrown your existing home, but love where you live. You don’t want to have to move away. You have friends in the area, it’s close to work and the kid’s school, and there’s that great Italian place just around the corner.
However, what you want to buy is either not available or not affordable in the same area.
Its OK – you still have choices.
You could renovate your existing house, add an extension or even demolish it and build a brand-new property. All are feasible options, but which is right for you?
The first step towards making the right decision is to take all emotion out of the equation, and think rationally about the available options.This article will help you understand the pros and cons of each, but the decision ultimately depends on your priorities and reasons for making a change.
The most obvious option, and a great place to start, is to look at renovating the house you already live in.
The number one benefit of renovating is character.
If your current home has period features, such as old timber floor boards or decorative ceilings, then renovation can really increase its appeal. Character, like trust, is something that has to be built up over time. You just can’t fake it in a new home (nor should you try).
Reno projects generally have a bit more space available too. Land sizes used to be a lot bigger than they are today, meaning you could still have a proper back yard even if you do extend.
You also wont have to pay stamp duty and there are no real estate agent or removal fees to contend with if you stay put.
Finally… you know the house. It feels like home. You know where the sun hits at certain times of day, what the best views are and which side the noisy neighbours live on. You can design your renovation project to maximise the benefits and minimise the rest, without losing your connection to the building.
Despite what reality TV might tell you – Renovation is not cheap.
On a purely per sq.m basis, renovating an existing building is likely to be the most expensive option. Renovation costs can easily blow out if you are not careful, and you really need to stay on top of your budget all the way through.
Renovations are generally also more complex than new-build projects and as such can take longer to complete. This is especially true if you are planning a bit of DIY in the evenings and weekends…!
You may be able to live on site, depending on the scale of the work, but it is likely to be dusty and noisy for quite a while. Not ideal if you have very young kids around.
If you really need to make wholesale changes to your house, such that very little of the original house will remain, then a renovation project may not be the best option.
Who is it best for:
If there is an established demand for character properties in your area, and property values are rising, then this could be a great option.
The best houses to renovate are structurally sound and really only require cosmetic updating, or perhaps a small extension. Often it is just a case of making the space you have work more efficiently, while bringing the layout inline with 21st century living standards.
Demolish & Rebuild
If the house needs just too much work, or you simply like the idea of living in a brand new house, then you might choose to build instead. One way to do this, without compromising on location, is to knock down your house and start again.
You will get a lot more house for your money.
Knocking down and rebuilding, while sometimes a little sad, can be more cost effective than renovating an old home – especially if the layout is likely to change dramatically.
Many building processes can be standardised and systemised, compared to renovation projects which tend to be more bespoke in nature. Builders will also work more readily to fixed price contracts, providing you with more cost certainty and fewer budget blow-outs.
Building a new house also means it can be custom-designed for your site and to your specific requirements. You will have greater creative control over the project and feel more involved in the process.
A well designed and properly laid out house, with the correct orientation and appropriate levels of glazing and insulation, will be much cheaper to run and more likely to increase in value over time. It will be both more comfortable and more exciting.
A new house should also have fewer maintenance issues, and any issues you do have will almost certainly be covered by the builders warrantee.
There are social issues to demolishing old homes. The historic character of the local area will be diminished, and the process creates a lot of waste than can end up in land-fill.
You should also consider the loss of investment and equity you might have built up in your existing home. You will have to pay for the demolition of the building and disposal of the building materials, and thats before you even start to build.
This option probably also takes the longest.
There is the demolition work, design development, various permits and approvals to apply for and then up to a year to complete the building work.
You will almost certainly need to rent a separate property during this period, and you may need to pay to store your belongings before the new house is ready to move into.
Who is it best for:
This would be a good option if there is little scope for development of your existing home, yet the orientation and location of your site is good.
It is not really suitable for period buildings. The best candidates are ugly, run-down houses that are usually worth little more than the land-value.
It is also worth considering that lots of companies will remove the whole house for you, either as a single unit, or piece by piece, for re-use and recycling elsewhere – saving on the landfill.
Something to think about
As always, it pays to do your homework upfront.
Check with your local council. Some local planning laws prohibit houses of a certain age or of specific historic importance from being demolished or changed significantly. Find out what ‘overlays’ apply to your property, and what rules apply.
Real Estate Research
Look for the types of homes that sell well in your area, and what the ceiling or highest recent sale price is. How close is your home, in terms of both its value and your personal investment, to this amount?
Speak to real estate agents and find out what your home might be worth if you upgraded it. (It is probably worth speaking to several agents and averaging out the figures). Work out the difference between this figure and what your home is worth now. This will help you set a budget and avoid overcapitalising, regardless of what option you choose.
How does this compare to the price of a brand new home in the same area?
What type of home do you want to live in?
Finally, think about your motivation for the project.
Perhaps you like the idea of breathing new life into an old building, reshaping and reinventing it in your own image, and putting your stamp on something. Or maybe you want a brand new home that nobody else has lived in before?
Do you want the hassle of renovating? If you are working full-time and/or raising a family, do you really want to spend every weekend working on the house?
Whether you choose to renovate or build, it is a big decision and an expensive one.
Don’t take it lightly, and don’t underestimate the value of what you already have.
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