Should I Stay or Should I Go?
Tuesday, August 16, 2016
People’s housing needs change over time.
Children come along, elderly relatives require care, you want more entertaining space or a home office.
At some point most of us will have to make a critical decision — should I stay or should I go? Renovate or relocate?
Both have benefits. There is the opportunity to add significant value to a dwelling by adding a room or modernising the kitchen and bathroom, while buying a new house means you avoid the disruption that major building work can inflict on daily routines.
Both have pitfalls. There is the risk of overcapitalising on a renovation, or distancing yourself from a community you’ve grown to love if you move elsewhere.
We’ve talked to two people who have both renovated a house and upgraded by moving to a new place.
Renovate - Angela Mollard, writer
“The bonus of renovation,” says Angela, “is that it allows you to construct specifically what you want to your own budget.”
“If you need another bedroom or a home office or a living extension you can design it according to the land size, needs and aspect.” Renovation can add hundreds of thousands of dollars to your home if you manage the costs and don’t over-capitalise. “Obviously if you build something idiosyncratic that future buyers won’t want you run a risk, but most people are aware of what adds value,” she says.
Angela enjoys doing up property and finding ways to transform space. “The way some people speak of a renovation you’d think all additions should come with a mental health warning, but if you do your due diligence, use recommended trades people and take time to go over details, it can be a genuinely enjoyable experience,” she says. “I loved learning about architecture and builder’s terms and the way joiners cut corners to keep down the costs. It’s a challenge working to a budget but also exhilarating seeing what a transformation you can make.
“Renovation can also lead to an income stream if you build a granny flat or an extra bedroom for a boarder. Obviously check with the council for planning permission.” She says other benefits of renovation are that you don’t have to pack up or pay expensive moving costs including stamp duty, new insurance and new mortgage costs. “You also get to keep your nice neighbours if you like them.”
Her view is that relocating can be expensive but if you’re smart and follow the sound principles of location, location and er, location, you stand to make a capital gain in the long term. “No kid loves moving schools endlessly so consider their education in your decision-making and also public transport options, but change is fun and it makes kids resilient and teaches them that home is actually what you carry with you, not the structure you live in.
“As for the downside of relocating, stamp duty is a killer so make sure you choose somewhere you intend to stay put for a while.
And draw up a checklist. “Buying a house requires a clear head; you can’t be won over by a perfect kitchen or an idyllic garden if the location is rubbish or there’s no off-street parking or storage. Be practical but also go with you instincts. And be decisive. If you love a place, chances are others will too.”
Again, do your due diligence, Angela says. If other property has recently sold in the area check it is not being rezoned for a childcare centre or high-rise structures. Also, find a real estate agent you trust and use them as a sounding board. The good ones will see you as a future vendor, not just a purchaser, and will want to maintain a sound relationship.
Relocate - Ella Riggert, business owner
Renovating always seems like a good idea at the time, says Ella. “It is really exciting to dream and plan but the headache is always in the execution,” she says.
She says that renovating allows you to create your perfect nest, to turn your vision into reality. “Living in a home that truly reflects your style and taste is hugely satisfying,” she says. “Every time I cook in the kitchen I admire something different in quiet thoughts to myself.” She also likes the fact that if you do it properly you stand to gain financially from all your hard work.
On the downside, she says it always takes more time and money than you counted on. “Inevitably, if you do a major overhaul, you will have to carry the cost of the property you are renovating and the rental accommodation in which you are living, which can cause financial heartburn,” she says.
“You will have a major problem with at least one element of the job (or tradesperson) which will force you to embrace the patience of Ghandi, the negotiation skills of the UN, and the financial juggling of Greece.” Moving to a new property comes with none of that stress of course, but in Ella’s experience it is difficult to get everything you want.
“If the new place ticks most of the boxes you are looking for in a house, you’ll be doing well,” she says. “Very rarely will you find a place that ticks them all.” Cost, too, is a big factor. Agents’ fees, stamp duty, bridging rent, mortgage set-up costs … the price of moving to a new address is hefty.
You could of course both relocate and renovate by following the old adage about buying the worst house in the best street. “I have done this myself!” says Ella. “Position is everything in real estate. If you can renovate the worst house in the best street - and make it good enough to mix it with the other real estate in the area - you could be on to a winning project.”
Ella’s last piece of advice is that if you are building from scratch or doing a major renovation, the general rule of thumb is whatever you spend on the land is what you will need to spend on construction.
Article written by Rory Gibson. Repurposed from the original post, Renovate or Relocate, on The Courier Mail.