Buying a home
Build, buy or renovate? Understanding your options
12 January 2023
If you’re on a journey to find the perfect home, you may be considering whether to buy, build or renovate a property. While the choice you make may depend on your budget, timeframe and long-term plans, it’s important to think about options.
Option 1: Building your home
Pros of building a house
You can choose the floor plan
A popular reason for building a home is the freedom of designing your own space. You can create your own floor plan and choose the perfect fixtures for your dream home. Additionally, you might have more control over where you put your money. For instance, you could opt for less extravagant lights and put that money towards high-end kitchen features instead.
You could save on stamp duty
Generally, when buying a property, you’ll be required to pay transfer or stamp duty based on the value, or consideration paid for the property. If you purchase land to build a house on, the stamp or transfer duty payable will generally be based on the value or consideration paid for the land.
Cons of building a house
It could be time-consuming
You may need to wait months or years for your house to be completed. Building your own house may also require a high level of involvement throughout the process. With so many decisions to make about the look and structure of the home, building a house may not be the ideal choice for those hoping for a quick move.
There may be unexpected costs
While you may have a budget in mind, you could find that this starts to unravel, especially if an unexpected issue were to arise that you had not yet accounted for. This includes adding extras or making changes during the build.
Option 2: Buying your home
Pros of buying an existing house
What you see is what you get
Choosing to buy an existing house allows you to see what you’re purchasing. To ensure you’re not running into any surprises, you may want to obtain a professional building and pest inspection. Take a look at Suncorp Bank’s article and video on what to know when buying a home.
The benefits of established infrastructure
Many locations where you can build a house are developing suburbs. They may require further travel to get to the shops, schools or other local amenities. An existing home may be in an established area closer to amenities. So, if you don’t want to wait around for the area to develop, you may want to buy a house in an area that already has everything you need close by.
Cons of buying an existing house
Potentially outdated designs
Finding an existing home with all the features you want may be a challenge. For example, some older properties may have just one bathroom and limited storage space.
Higher maintenance costs
While they can be beautiful and unique, homes that have been ‘well-loved’ may require repairs as well as upgrades of kitchen appliances, heating/cooling systems and features such as plumbing, roofing, windows and cabinetry.
Option 3: Renovating your current home
Pros of renovating a house
Increase your home’s value
One reason people decide to renovate is because of the value it can add to your home. While kitchens and bathrooms are common spaces to renovate, you can renovate any space in your home.
More affordable than buying a new home
Instead of forking out money to buy a new property, you may be able to renovate the space you already have. Renovating to solve issues around the house, such as a leaking tap or outdated carpet may be better for your budget in the long term – especially if you’re already living in a location you love.
Cons of renovating a house
Risk of overcapitalising
Overcapitalising is a common mistake that can be made when renovating and occurs when you spend money on renovations or improvements to your home that do not reflect in the resale value of your home. For example, if you spend $50,000 on a new kitchen that only adds a value of $20,000 to your home, then you have overcapitalised.
Renting while renovating
If your renovations include structural changes that make it difficult for you to live in your home, then you might have to consider renting while the renovations are taking place. If you do rent, this can be costly as you will need to keep up with your mortgage, finance your project, and pay rent – all at the same time.
Financing your great Australian dream
Deciding on whether to build, buy or renovate your home? At Suncorp Bank we can help you understand your options. All consultations are 100% obligation-free.
Discuss your property development goals with us today and we’ll help you find a suitable home loan option, so you can be one step closer to your dream home.
- What it pays to know before building your own home
- Everything you need to know about construction loans
- What I learned from renovating my house
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The information is intended to be of a general nature only and any advice has been prepared without taking into account your particular objectives, financial situations or needs, so you should consider whether it is appropriate for you before acting on it. We do not accept any legal responsibility for any loss incurred as a result of reliance upon it – please make your own enquiries.