Browse Forums General Discussion 1 Apr 20, 2010 11:31 am Hi there, I'm pretty sure this is a common dillema for people on this forum, and I'd appreciate if anyone has any feedback on which way to go. We have a house in a lovely location on Brisbane's Inner Southside that is just where we want to be and we have our kids in school etc. We bought the house 10 years ago for $180k and we've had it recently valued at $550k. Over the 10 years all we've outlayed is $2k for new guttering and recently spent $19k on redoing the bathroom that we love. Now we need a bit more space for the family and we have a few options. We are effectively debt free too. Option 1 is to buy a house in the same location. Sell current house for $550k. Spend $50k on buying and selling costs and get a loan for $250k to buy a house worth $750k. Option 2 is to renovate the current house to how we want it at an estimated renovation cost of $250k. This may not make the house worth $800k according to Real Estate agents but I think they have a personal interest to see us not go down this path. We arent renovating for profit, just for lifestyle (althought we certainly dont want to seriously over capitalise). Houses in our street would range from $500k to over $1.5M Option 3 is to buy land or existing house to knock down and build brand new. Houses that are similar in spec to what our reno would give us, would cost approx $300k but at least that gives us a brand new house. BTW our house is probably too good to knock over, especially with the new bathroom My heart says renovate and dont be afraid to spend the $$ because we'll be living in it for the next 10 years at least, but the head is wary of spending that much on a reno, when I know what you can get brand new for the extra $$ but its just soo hard to find a decent knock down let alone vacant land. I've read articles saying that spending more than 25% on a reno is not good, but I'm realistic at how much a good reno would cost. ie, 50% of the current market value. Someone who's been in this position... please give me some guidance Cheers Re: To Renovate or Not to renovate ... that is the question. 2Apr 21, 2010 12:14 am I prefer option 1 the outlay is 250 to increase you portfolio by 36% option 2 is outlay same and increase speculatively 30% 3 is unclear more info required Re: To Renovate or Not to renovate ... that is the question. 3Apr 21, 2010 10:57 am There's a lot to be said for staying in a location where you are very happy. Better the devil you know and all that! A factor for me would be whether your home's current value is all land value. If there are houses on the street for up to $1.5m is that just because the land is much bigger (in which case that's not a useful indication that you can't overcapitalise)? Another factor: is it a period home? If so, and that is appealing to buyers in your area, that's another thing to factor in. a renovated period home may be much more attractive (and therefore valuable) than a new build. Also, you say you could build a new house for not much more, but does that include all the extras that often aren't factored in to house prices? And would land in a location similar to your current one cost nearly as much as you would get for your current house because the current price is based on land value? Hmmm, lots of questions and no advice really!!! Re: To Renovate or Not to renovate ... that is the question. 4Apr 21, 2010 11:31 am Before embarking on renovating - really do your research of your area. Personally (after renovating a total of 3 homes - yes I'm slightly mentally unstable! ) we found lots of hidden costs with renovating. And you should definitely set boundaries otherwise it can get out of control. Also you need to factor in if you will be living in it while renovating (done that twice - not much fun, especally with kiddies). I would suggest to go to some open homes, you might be surprised at what is for sale around your area, especially in the current market. But if you do decide to renovate - spend the money on a decent architect, especially if you going to live in it for some time, you want to get it right and consider different options. Sometimes we can't see the forest through the trees..so professional advice could really help. Anyway - just my thoughts - I wish you all the best which ever you decide Building with GDevelopments Re: To Renovate or Not to renovate ... that is the question. 5Apr 21, 2010 12:28 pm Thanks very much for the replies guys. The reason for the houses in our street ranging in price is that 300m up the road has full city views of Brisbane. Land size is the same for all houses. This makes me feel comfortable in spending some money on our current house because there is a lot of money in the street and it has a good name. The thing with our area is that most original homes are post-war and not many are heritage listed, people are more often getting the slightly bigger blocks (aka 800m) and splitting them to build 2 new houses. We like having a 650m block. We've been in the area for more than 10 years now and know it really well. We'd love to borrow $250k and use that to sell and buy a new house for $750 (assuming $50k buying and selling fees) but unfortunately there is nothing in the market for that $$ that will give us what we would get if we renovated. Houses for sale are either existing layout /renovtions for around $650k or brand new homes for $850-$950k. Put it this way, if we could buy what we would end up with after our renovation for the price it would cost us, without having to do it ourselves, we'd do it in a heartbeat. We'll be in this house for at least 10 years.. I guess I'm answering my own questions ? Either find somewhere for $750k that we'd be happy with OR renovate and spend the $250k. PS. Yes we will be living in the house during the 3 month reno and yes we know it will be a trying time. But we have a small lounge, all our bedrooms and renovated bathroom that are in a seperate area away from the renovation part. Only thing is what to do for a kitchen and laundry (althought we do have a lock up area under the house with lighting and electricity and a BBQ) Thanks again guys... someone just tell me it's the right thing to do !! hahah Re: To Renovate or Not to renovate ... that is the question. 7Apr 21, 2010 3:43 pm We went through the same dilema as you and have decided to renovate. We even had our house on the market to sell with a 3 week old baby! But going through the process of looking to buy made us realise how much we liked our area, what we would save on agents fees and stamp duty can go towards the renovations and we would be getting exactly what we wanted. Looking at houses to buy when you actually might be buying them rather than then the thought of maybe buying them made us look at them totally differently. Every house needed quite a bit of tweeking to get it how we wanted it still. So I would say renovate!!! and if you can get it done in 3 mths you have a brilliant builder!!!!!!!!!! Re: To Renovate or Not to renovate ... that is the question. 8Apr 21, 2010 4:16 pm I think you have pretty much answered your own question. The main thing for me would be the inconvenience of renovating. Arfur Re: To Renovate or Not to renovate ... that is the question. 9Apr 21, 2010 7:45 pm Renovating and or extending is definitely inconvenient, but GAWD, so is moving and building..... Re: To Renovate or Not to renovate ... that is the question. 11Apr 22, 2010 9:05 am Financially the answer would be to renovate. If there are $1.5 million houses your street then I seriously doubt you could be overcapitalising on your numbers. And if you plan to live there for the nect 10 years then any minor overcapitalisation is pretty much irrelevant. We are renovating, 2 kids under 8, no kitchen for 8 weeks. It's a hassle but really it is not that difficult. As another poster says, keep a close budget and stick with it because costs can blow out very quickly. Re: To Renovate or Not to renovate ... that is the question. 12Apr 22, 2010 9:36 am Thanks for the replies everyone, glad to see people that have gone through a similar decision process. We've been looking every house that's come up for sale in our suburb for the past 5 years and we've never seen a house for $750-800k that is something we would be happy with without spending more $$, so reno is the obvious answer. Besides, this is OUR home and despite people saying not to get attached, it's easier said than done Wow 8 weeks without a kitchen Melrich.. fingers crossed we dont have to go quite that long. Thanks again everyone, I really appreciate the feedback. Will be sure to post the plans and ball park figures from the builder which is due tomorrow. Then perhaps you can double check our decision Cheers Re: To Renovate or Not to renovate ... that is the question. 13Apr 22, 2010 11:45 am If you love your location and aspect then I would think renovating is a good idea. We can not afford to move/buy so we are renovating - with 4 children aged 2 - 7. It is messy and sometimes frustrating but I think it will be worth it in the end. Re: To Renovate or Not to renovate ... that is the question. 14Apr 25, 2010 8:57 pm We've had some quotes come through for our renovation. Cant believe the price of reno's compared to the new house prices. We're not silly, we expected a difference but not this much. Adding 70sqm living space + 50sqm deck all under a new roof comes in at about $260k according to the initial quote... ummm why would I not just buy a new house ? PS. that does not include kitchen, air con or flooring. Re: To Renovate or Not to renovate ... that is the question. 15Apr 26, 2010 11:27 am The cost of renovations is insane these days. Our place is heritage protected so unfortunately we can't build new but let me just say that our costings were WAY over what we imagined as well. Renovation Thread: viewtopic.php?f=31&t=38489 Re: To Renovate or Not to renovate ... that is the question. 16Apr 27, 2010 2:08 pm How about another option, since you are debt free, and the area is good... why not look for a house in the area with better view and sufficient room/space, then buy that house using both (your current house + new to-be-purchased one) as security. Might be a bit tough in the beginning, you saved the trouble of renovation, you saved the expense for selling house, and in the long term you got 2 houses instead of 1 that increased in value everyday! Re: To Renovate or Not to renovate ... that is the question. 17Apr 27, 2010 8:24 pm Problem is that a house that you're talking about will cost >750k and there's no way in the world we're going to service that kind of loan, even with the rental income we'd get from our current house. I like the idea, and in the long term it's a great idea but we're reasonably risk averse and we'd feel too exposed being that much in debt. Our reno limit will have to increase to $250k I think. Waiting on 3 more quotes now. Re: To Renovate or Not to renovate ... that is the question. 18Apr 28, 2010 2:17 pm Facing the same dilemma we sold, bought land in the same suburb and are about to build a fabulous house. 1 year later I would honestly do just about anything to get our old house back. If you're listening to your heart on this then definitely stay put and renovate. Re: To Renovate or Not to renovate ... that is the question. 19Apr 28, 2010 3:36 pm I know those inner Brissy suburbs very well and my gut feeling is definitely to renovate. I think in 10+ years time you will be sitting on a gold mine By the way, if you do go down the renovation route, please start a thread in here so we can follow your progress. I'd love to see the transformation Good luck! Blog: http://bluemistkids.blogspot.com "Never be afraid to try something new. Remember, amateurs built the ark, and professionals built the Titanic." Re: To Renovate or Not to renovate ... that is the question. 20Apr 28, 2010 8:57 pm Thanks for the replies guys, we'll definitely make a thread and track the progress of the renovation from start to finish. I'm more then happy to share the costs and experiences so that people can get a real idea on a renovation like ours. I know how invaluable this can be to other people and I wish I could read something similar before we get started. mb@147a, would be really keen to hear why you wanted to get your old house/block back. What was the major reason ? the step up is 30mm and wanting it to be flat . how much does the concrete have to be lowered .we plan on removing bath and lenghten shower and adding seat. the old bath… 0 11836 if the original house is in good condition most of what you listed could be added in stages without the need for KDR and costs and disruption of having to live elsewhere… 1 13684 The HIA contract, in the term & conditions section states that "Commencment" is deemed when the drainage is started or the piers are dug or the slab is formed up (incase… 2 6182 |