It may seem like a daunting task to sell your home rather than to renovate – the process looks tedious, and you and your family may have emotional attachments to your home. But there are a lot of pros that side with selling your home that you may not know or may not have considered.
1. Home renovation actually costs a lot more than you think! If your home has been sitting for too long, it could actually cost less monthly when you purchase a new home. Also, take into account the amount of equity you hold and the types of renovations you’re considering.
According to Rob Caulfield, director of Archicentre, the building design and advisory service of the Australian Institute of Architects, renovating more than 50% of a home has to be made to comply with current building regulations. This could possibly mean getting new wiring, plumbing, and new energy rating – so basically a whole part of the house may need to be insulated and the cost can be quite hefty. Take note that you may also need to hire professionals and that a contingency fund for cost and time overruns is necessary. If you intend on financing renovation costs, use a mortgage calculator to determine just how much your existing mortgage and a renovation loan/ home equity loan or line of credit would cost versus a new home mortgage.
2. There are few returns to renovating your home. No matter how good you think your renovations will upgrade your home, keep in mind that no renovation will produce a 100% return.
Based on a recent study, you will recoup only 64.4% of a remodeling project’s investment dollars if you do sell in the future. So if you do plan to sell, just prioritize the important parts of the home that need fixing such as the roof, the kitchen, and plumbing.
3. A new home environment entails a fresh start at life. If you’ve stayed in a single area in a long while, you may be feeling burnt out with seeing the same spaces every day. Sure, the familiar is comfortable, but moving to a new place may give you and your family a refreshed perspective because you’re now located in a different living space.
Another noteworthy benefit of selling and buying somewhere new is you can accommodate the current, and future, needs of your family without going through the mess of renovating.
4. Renovating can be a major hassle. Take inventory of your skillset and ability to manage and deal with contractors, as well as renovation costs for major renovations. If you haven’t done all these before, there may be a lot of room for budget overruns and unexpected complications.
Sure, renovation can be a good idea, too. But don’t dismiss the chances of you getting a better deal by selling your house instead. Talk it over with a professional before making your final decision.