Renovate Or Relocate: What's The Best Option For You?

There's no place like home, as the old saying goes.

Your home is your haven, your comfort space, your sanctuary. Where else do you relax, rest and recover from each long week?

A home is a place to cook popcorn, watch a movie and unwind during the evening, and also somewhere to play cricket in the backyard, to host a barbecue or to engage in any sort of hobby or leisurely pursuit. It should be where you feel the most comfortable, safe and secure. 

Sadly, homes aren’t always forever. For various reasons, there may come a time when you need to move, and if you’re planning on getting a new place, a home loan borrowing calculator can help. It’s possible that you’ve outgrown your old home: welcoming another child to the family or having an elderly relative move in might mean you need more space than you have. Your current home might also not offer enough storage space for all your stuff.  You might also want to live somewhere that has better transportation. 

When this happens, you might also choose to stay where you are and renovate your home. Renovation and relocation each have their pros and cons. This article will help you explore the two options and some considerations for each potential approach. Keep reading to learn more.

Home loan options for a relocation

If you relocate, you may have to take stock of the different home loan options and your personal finances to see if you can afford a new home. If you're upsizing, this is especially prudent. Even if you plan to sell your current home, you might still not have enough to buy your new place outright, especially if you have a current mortgage on your home. You might find yourself a few hundred thousand dollars or more short of your goal. 

A home loan is the best way to finance a bigger house, but figuring out both how much you can borrow and what repayments you can afford will be tricky. There are various home loan calculators available online that can help you crunch the numbers. Most even allow you to input your current home's value to help you understand how you can utilise its equity to finance your next home purchase.

Costs of renovation

A significant home extension, such as renovating the back of your house or building another storey, can be expensive. Costs may range anywhere between $150,000-300,000, depending on the extent of the renovation and the size of your home. This can even be costlier than relocating, and you’ll need to get some quotes in order to make the best financial decision. However, you'll typically need to pay for preliminary designs before you can get a quote for a renovation, so factor this into your decision. 

Relocating is a big bob

Moving houses is never easy, especially as you age and accumulate possessions, furniture and all the trappings associated with having lived somewhere for a length of time. A move can also be stressful for your kids, if you have any: permanently moving to a new area can affect the friendships they’ve made in school, and they’ll need to get used to a completely new place. 

The move itself can be a mammoth task, as you need to pack up all your stuff, book removalists, transfer all your utilities, and more. This on its own will cost several thousand dollars, which is in addition to the new home loan and purchasing fees such as conveyancing and building and pest inspections. 

Another factor is that you’ll be uprooting your life and beginning in a new place. You may have to find a new job, depending on the distance you're moving, and enrol the kids in new schools and extracurricular activities. As mentioned above, this can be extremely demanding on the whole family. It's worth thinking about whether the hassle and cost are worth it, or if you might be better off renovating your current home.

Renovating can be disruptive but worthwhile

Depending on the scale of the renovation, it can significantly disrupt your life. As a rule of thumb, if the kitchen or bathroom is part of the renovation, you will need to lease another property while the work is taking place. You’ll need to eat, and you’ll need to use the bathroom. 

A short-term lease for usually three or six months is required. Even if you don't have to do this due to having at least one kitchen and bathroom not under construction, you’ll be living in a dirty, noisy and chaotic house while the renovation takes place. This can be a small price to pay for additional rooms and space in your home, though, so it's definitely worth doing if you decide that an extension is the best option for you. 

Relocate - brand new home?

If you relocate, you could even build a new home or purchase one off the plan, which means buying an apartment or townhouse before construction has finished. This way, you are guaranteed a brand-new property with all the benefits that come along with it. If you're moving from an older, run-down home, this can be a major plus for the relocation option.

In the long run, buying a new home can also be cheaper for you, as you won’t have to spend as much on upkeep and maintenance. 

If you live with family, you’ll need to take into account how either will impact everyone’s lives. You’ll also need to consider the associated costs, and understand how the decision will impact your financial health.

This is not a decision to take lightly. Give yourself time to think it over, and when you’ve made your decision, get as much help as you can and prepare yourself for some significant life changes.