As we change, so do our living needs and what we require from our homes. So the big question is: do we uproot and move on to something new, or do we renovate our home to grow with us?
Factors such as: being happy with your neighborhood, having children at local schools, and loving your location will very possibly make renovation are more appealing option. But before considering it, take a good look at your finances. It’s important to be realistic about your budget and the ultimate cost of renovations so that you don’t overcapitalise or get caught short.
Renovations also require you having to deal with council regulations, legal issues and the day-to-day inconvenience of living in a construction zone. Another factor to consider is timing – the timing of your renovation in relation to the length of time you occupy the premises should be taken into account when considering if the project is worthwhile or not.
A study in the U.S. found most improvements undertaken with the cost of a tradesman do not result in an immediate capital growth, equivalent to the cost of the project. It additionally found that remodelling the kitchen gives the best return with between 80-87% of the money invested.
Generally, the best time to renovate is shortly after purchase so that you can enjoy the benefits of the renovation for an extended period of time. It’s also when you will get your best capital return. And the absolute worst time to undertake a major renovation is immediately before selling. Not only is it stressful, but the chance of obtaining a worthwhile return on your investment is slim.