Renovate or Buy? What’s Right for You?

If you have outgrown your existing home or you’re just looking for a larger, more fashionable and up-to-date home you have two choices:  you can renovate your present house or you can buy a new one.  When it comes to a new home, you have the choice of buying a pre-built home in a development area or you can choose the ultimate homeowner’s dream – designing and building your own custom home.  First, let’s look at the issue of renovating versus buying.

If you like searching the Internet for information, you’ll find a variety of articles pointing out things to consider when deciding whether to renovate or buy.  Many experts focus their advice on cost issues.  Perhaps you have friends who have ended up spending far more than anticipated on a major renovation project.  Cost overruns can be unpredictable in renovation efforts, while the only variable in the price of a pre-built new home is the extras and add-ons you might want, such as better appliances or cabinetry or flooring.  But even these are relatively predictable.

Another major downside of renovation is improving a home beyond the increased value you might get from the sale of the home.  Far too many homeowners have made this mistake, thinking that renovating guarantees a dollar for dollar return on the investment when it comes time to sell the house.  In summary, if you renovate your home, you can’t always predict the final cost of the renovation and you might not recoup it when you sell.  The cost of a new pre-built home is predictable.  Custom built homes, however, are subject to the same cost overrun concerns as are renovation projects.

Here’s something to consider that you rarely hear mentioned anywhere in the multitude of articles on the Internet about the renovate or buy decision.  Consider this key question:  Are you renovating or buying within a buyers market or a sellers market?  Right now Australia is still in a sellers market – where there are more buyers looking for homes than there are sellers willing to sell their homes.  In a buyers market – where there are more homes available than there are buyers looking – it’s easier to find that dream home.  In a sellers market buyers frequently settle for less.

Many buyers who become frustrated with the time it takes to find the right house in a sellers market gradually come to realize that maybe they like their existing homes more than they thought.  They begin to see possibilities they hadn’t thought of before.  Renovation might be the way to go in a tough sellers market.  There’s more to a home than just the house; there’s the community.  If you like your location, your neighbors, your schools, the amenities available in your area, why not stay?  Just take the time and effort it takes to learn enough about major renovation so you can better control the costs.

There’s another option for people who like their community, but see no potential dreams in improving their existing house.  Tear the house down and build your custom dream home in the same spot.  On the surface this seems like a strange idea, but these “ knockdown/rebuild’ projects are growing in popularity.