Buy, build, or renovate?

If your house is feeling a little cramped or is in need of some TLC, you might start thinking about making a change. Making the choice between buying something bigger, building new or renovating the home you already have is a big decision. Exploring the pros and cons is a great first step to making the right choice for your family.

Buying an established home: pros

What you see is what you get. Unless you're buying a fixer upper most of the work is already done and you can see exactly what you're getting. A building and pest inspection will give you peace of mind your new place is free of any problems, so all you have to worry about is getting the right finance and making the move.

Quicker and less stressful. Making an offer and bidding at auction can be stressful, but it's generally a quicker and more straightforward process than building or renovating.

Better for budgeting. The fixed cost for buying a new home means you’re more likely to stick to your set budget.

Buying an established home: cons

Take it as is. Buying an established home means you won’t have the same opportunities to customise the space to meet the needs of your family.

No first home owners grant. You'll miss out on the Queensland first home owner's grant unless it's a newly built home.

Building a new home: pros

Do it your way. From the floor plans to the fittings and fixtures, building new means getting to choose every last detail to suit your taste.

Less maintenance. There's no need to worry about old air conditioning units and peeling paint which means your maintenance costs are generally less compared to an already established dwelling, at least in the first few years.

Less stamp duty. When you're building new you only have to worry about stamp duty fees on the land, compared to buying an established home which incurs stamp duty fees on both the house and land.

Building a new home: cons

It takes time. There's no controlling the weather, so building new generally takes longer than expected. You'll also need to make time to manage the build, wrangle contractors and make decisions along the way.

Limited location choice. Before you can start you have to find the land to build on – so you’ll be limited in your location choice by what's available. It's worth keeping in mind that land close to the CBD is almost impossible to find, and very pricey.

Construction loans can be complex. You may need a bigger deposit to secure a construction loan compared to a mortgage, and construction loans are generally more complex than a ‘normal’ mortgage. Often you will need professional construction plans and a property appraisal to apply.

Keeping to a budget. Sticking to a set budget can be tricky with a new build. Even with a contract in place things have a tendency to change as the build progresses and costs can fluctuate.

Renovating: pros

You get to stay put. If you love where you live renovating your current home could be a good option. You get brand new, customised features in a place you already know and love.

Boost your home's worth. Adding a $30,000 swimming pool doesn't necessarily add $30,000 worth of value to your home. But if you're smart about managing your renovation budget, you could boost the future sale price of your home. If you're looking to add to your home's value by renovating you should not only consider what your family needs but what potential buyers in the area will look for.

Renovating: cons

It takes time. Like with building a new home, renovation projects are difficult to deliver to an expected time schedule, especially if you're changing things as the renovations progress.

It can be stressful. Ask anyone who's done a renovation and they're likely to tell you it was a stressful experience. Why? There are a lot of decisions to make and things might cost more than you're expecting. It’s likely you’ll have to move out of your home for a while or put up with living in what is essentially a building site.

Extra rental expenses. If you're moving out of home while the renovations happen you may be up for rental expenses. You’ll need a backup budget plan if timelines blow out and rent ends up costing more than you had planned.

Not sure where to start?

Call QBANK on 13 77 28 and we can talk about your options.

Posted in

Home Buying

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