The Residential Dilemma: Should I Renovate or Sell?

Finance Advice | 29 Jul, 2021

Should I renovate or sell? We’ve got some help here.

The residential housing market is strong here in Queensland, and it’s only going to get stronger. In fact, a recent report released from ANZ Bank forecasts Brisbane house prices will rise by a 17% through 2021.

ANZ twitter report on housing research

Low interest rates and high demand combined with rising equity in residential properties is leading a lot of homeowners to ask themselves, should I renovate or sell?

The Residential Dilemma: Renovate or Sell?

Knowing whether to renovate or sell your home can be a tough choice, especially for residential owners who aren’t necessarily tapped into the inner workings of the residential property market. But there are many reasons why you might want to sell your home and upgrade to a bigger one. And there are many other reasons why it might be better to renovate and remain in your current home.

Here are some considerations that can help you make an informed decision.

Determine What Results You Want

Your first step is to figure out what you’re looking for in your ‘new’ home. This will be a very personal decision, of course. But at the end of the day you will want to end up in the house you need – whether that’s in the form of an upgraded new home, or in a renovated version of your current home.

Perhaps you’ve had another child, which means you need an extra bedroom. Maybe you and your partner both work from home full time now and need a larger office space to accommodate those changes. Or maybe you’re ready to put the time and money into creating outdoor living spaces that meet the social needs of your family. Whatever it is, that end result is the goal that you’re looking to achieve.

Consider Your Budget

The next, and arguably most important step, is to consider your budget. How much money do you have to put into a new mortgage and how much money do you have to put into a renovation? Again, determining your budget will involve personal considerations – such as your risk appetite – and practical considerations – such as your borrowing power. This is something that we can help you determine here at Stapleton Finance. And once you understand your numbers, you’re in a stronger decision-making position.

Consider Associated Costs

Once you’ve nailed down the numbers, it’s time to look into the associated costs. Speak to builders who can give you a quote on completing the work for your renovation. Speak to a buyer’s agent or locally-based real estate agent about house prices in the area that you’re looking. And speak to our experts at Stapleton Finance to understand what you can access via financing. Then apply those numbers to your budget.

Your numbers will help you understand your choices, and the answer to the question, should I renovate or sell?

Consider Your Equity

In today’s market your rising home equity can be a real factor in your decision making. So, when deciding whether you should sell or renovate, it’s vital that you take into account the equity you have on your current home.

In some situations, the equity in your home can help you to cover the cost of renovations. In other cases, your home equity may be better applied to helping you purchase a new home for less than the cost of renovating. Maybe your home is an older home, or needs repairs. If so, it may need a bigger cash injection above the cost of renovating. Either way, your equity can be leveraged to propel you into a better position – whether that’s through renovation and an equity access loan, or through selling your current home and entering into a new mortgage on a new home.

If you have enough equity on your property, but don’t want to sell, you can use that equity to buy your next home, while maintaining your current home as an investment. Turning your home into an investment means that you can leave it to appreciate over time. You’ll also be able to realise any capital gains if the property market continues to improve. And an investment property is a great way to generate monthly rental income, as well.

Read more about How to Leverage Your Home Equity.

Understand the Current Market

The current market situation is one of the most important factors when it comes to residential property buying and selling. You’ll want to understand what is happening in the market, look at the short and long-term predictions and consider whether selling your home right now will give you the best return on your investment.

As of July 2021 we’re in a boom here in South East Queensland. Many of our clients wonder whether it’s best to take advantage of those current high prices and sell. Or should they hold out for even higher prices? Or should they stay in the home because of the fierce competition in buying something new?

The answer to should I sell or renovate in a boom market isn’t a simple yes or no. Beyond the market and financial considerations there are personal considerations. Do you need a new home with different lifestyle options? Do you really need extra space? Or do you need to relocate to a new area? You might find that renovating could come in a little bit less expensive, but that it will otherwise be too time consuming or disrupting.

On the other hand, in terms of renovating benefits, you’ll be able to stay in the same community and school zone. You’ll be close to those local amenities that you’ve grown to love. And you’ll avoid the disruption of relocating the family to a new area. All of these are factors are personal to you, and will effect whether you decide to sell or stay in the current market.

Speak to Our Team of Experts

At Stapleton Finance, our team understand the market and the pros and cons of buying versus renovating. We can give you expert advice that is tailored to your specific situation so you can be confident in your decisions.

Once you’ve decided what path to take, our team can help you access your equity or obtain further financing so that you can get the home best suited to you and your family’s needs.

At Stapleton Finance we can help you get the financing that suits your particular needs and financial circumstances whether you’re looking to sell and upgrade or renovate and remain in your home. Get in touch today.

Sharing is caring!

Related Content

Getting Your Finances Holiday Ready: Holiday Financial Planning With Stapleton Finance

It’s the holiday season! Here are some top tips to manage your holiday financial planning. The holiday season can be a fantastic time of year. It can bring joy, time with friends and family and lots of fun festivities. Unfortunately, it can also often be a strain on your finances. At Stapleton Finance we certainly […]

Read More

Get a leg up the property ladder with LongView’s Buying Boost

LongView Buying Boost helps you get on the property ladder by ‘boosting’ your equity and helping you through the buying process. Here’s how! The ‘great Australian dream’ has long been for every Australian family to own their own home. But unfortunately it’s not always as simple today as it may have been 20, 30 or […]

Read More

6 Benefits of Refinancing

Most homeowners understand one main benefit of refinancing – getting a lower interest rate. While this is definitely one of the important benefits of refinancing, it’s not the only one. As mortgage brokers our team have seen all the many benefits of refinancing. We love to help our clients grab these benefits and better their […]

Read More