{"id":8295,"date":"2024-01-22T12:11:52","date_gmt":"2024-01-22T01:41:52","guid":{"rendered":"https:\/\/adelaideprivatewealth.com.au\/weighing-up-whether-to-renovate-or-sell\/"},"modified":"2024-01-22T12:11:52","modified_gmt":"2024-01-22T01:41:52","slug":"weighing-up-whether-to-renovate-or-sell","status":"publish","type":"post","link":"https:\/\/adelaideprivatewealth.com.au\/weighing-up-whether-to-renovate-or-sell\/","title":{"rendered":"Weighing up whether to renovate or sell"},"content":{"rendered":"
It\u2019s easy to be inspired by the super-profitable renovations and dream rebuilds we see on TV. <\/strong><\/p>\n In real life, the picture can be a little different. The key to achieving your particular dream home is to arm yourself with the comparative costs for both selling and buying, and renovating, with a clear understanding of what\u2019s possible on the funds you can raise \u2013 and afford to pay off. So, let\u2019s take a look at some things you need to consider.<\/p>\n Calculating how much you can afford to spend involves getting a current valuation of your property. Once you know your existing equity, you\u2019ll have a clear picture of what you can afford to borrow and spend on a renovation or a new home. Both options often involve re-mortgaging, with the renovation needing an offset facility that allows you to draw on those funds.<\/p>\n When deciding on how much of your equity to use, you need to keep in mind the loan to value ratio (LVR) of your new loan amount. If your LVR is higher than 80% for your new loan, you may be required to pay lenders mortgage insurance on top of your already larger loan.<\/p>\n To get an accurate picture of whether renovating or moving would be the most economical solution for you, you will need to compare a few figures. These include the comparative costs of selling and buying something similar to your renovated property in your desired area.<\/p>\n Buying a new property means paying for conveyancing, stamp duty, marketing and agent and solicitor\u2019s fees. While these costs haven\u2019t risen a lot, the timeframe, costs of building materials and the labour needed for a renovation have. This makes it especially important to budget a renovation accurately, so you are able to compare these costs against buying a move in ready property, where everything has already been done.<\/p>\n The alternative scenarios you\u2019ll need to consider include whether the home you want to create is realistically within your budget to buy or renovate, and if you could potentially end up overcapitalising.<\/p>\n Overcapitalisation is a consideration many would be renovators overlook but need to be aware of. This is when the cost of the renovation is more than the value added to the property. You may be happy with this if your aim is to create your forever home, but it may present financial challenges when the time comes to sell.<\/p>\n Again, research and accurate financial forecasts are important. You\u2019ll need to consider the current value of your home, what it would potentially be worth when the renovation is complete and the price point of equivalent homes in your area.<\/p>\n Homeowners choose the renovation route for lots of good reasons. Some may want to get a property ready to sell or to transform a loved but too small or dated home. While others may not be able to afford to buy another home that is suitable, or want to increase the rental value of an investment.<\/p>\n Whatever your reason for renovating, you need to remember that it probably won\u2019t happen quickly or cheaply. This means proper planning and adding in some financial wiggle room, is vital for a realistic budget. This includes deciding on extras such as the quality of your fixtures, alternative accommodation, and employing a site manager or architect to organise trades, manage council approvals and manage the project budget.<\/p>\n There is a lot to weigh up before deciding between a renovation and property move. We\u2019re happy to help you get the facts you need to make a fully informed decision and reduce any unexpected costs, so please get in touch to organise a chat.<\/p>\n Setting your renovation up for success<\/strong><\/p>\n Set a budget<\/p>\n<\/li>\n Consider what you can do yourself i.e., painting<\/p>\n<\/li>\n Understand the feasibility and costs of your ideas<\/p>\n<\/li>\n Employ trusted trades<\/p>\n<\/li>\n Start any council approvals or apply for permits early<\/p>\n<\/li>\n Speak to us about financing your renovation<\/p>\n<\/li>\n<\/ul>\n Important: This provides general information and hasn\u2019t taken your circumstances into account. It\u2019s important to consider your particular circumstances before deciding what\u2019s right for you. Although the information is from sources considered reliable, we do not guarantee that it is accurate or complete. You should not rely upon it and should seek qualified advice before making any investment decision. Except where liability under any statute cannot be excluded, we do not accept any liability (whether under contract, tort or otherwise) for any resulting loss or damage of the reader or any other person. <\/span><\/p>\n Any information provided by the author detailed above is separate and external to our business and our Licensee. Neither our business nor our Licensee takes any responsibility for any action or any service provided by the author. Any links have been provided with permission for information purposes only and will take you to external websites, which are not connected to our company in any way. Note: Our company does not endorse and is not responsible for the accuracy of the contents\/information contained within the linked site(s) accessible from this page.<\/span><\/p>\n The post Weighing up whether to renovate or sell<\/a> appeared first on MLC Contemporary<\/a>.<\/p>\n<\/div>\n<\/p>\n
Know your budget limits<\/h3>\n
Comparing the costs of renovating and moving home<\/h3>\n
Matching your renovation to your budget and timeframe<\/h3>\n
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