Choosing whether to renovate or build from scratch can prove challenging but for most home owners, the choice usually comes down to the individual client’s needs and wish list, their site and their budget.
These are some key questions you can ask yourself to help make your decision easier.
1. Is building new cheaper than renovating?
The cost per-square-metre of a new build is generally cheaper than the cost per-square-metre of a renovation. This is mainly due to the expense involved in upgrading an existing home and the increased labour required to tie a new addition into an old building.
Where the costs for building a new home are usually known upfront, renovation costs are more difficult to predict. This means the builder needs to build a contingency into his quote to cover unexpected expenses. People working with an existing house are often trying to save money but there are more hidden costs.
You might find asbestos, or need to do rewiring and plumbing. People don’t realise there’s more patching and rendering and that repairing an old house can be a major expense especially if it needs reinforcing or underpinning structurally.
However if you’re building a high-end home, it will cost as much if not more than a renovation. Most people do their figures based on a basic project home, but once you start customising the costs creep up. You also need to remember that your project cost will come down to the number of square metres you build. If you have a 200 square-metre home and you add 100 square metres at $3000/square-metre, it’s still going to be cheaper than building 300 square metres at $2000/square-metre from scratch.
2. Am I allowed to knock down my existing house?
Before you start making grand plans to bulldoze your home, you’ll need to check with the local council if your property is subject to any kind of preservation order. It may be heritage-listed or positioned in a suburb with a heritage overlay, which protects a whole urban precinct. If there is a restriction on your property, you may need to retain the entire building or you may only be required to retain the facade. Your renovation may also need to be “in keeping” with the period of the existing home.
3. Am I allowed to build a second storey?
All councils have height restrictions for residential buildings, and in some instances there are restrictions on whether or not you can build a second storey, particularly if the streetscape is largely single-storey.
There are also floor space-ratio rules governing how much of your land you can build on so before you design a sprawling addition. Check with your local council on the floor space-ratio for your neighbourhood.
4. Is my existing house structurally sound?
If you love your existing house and you’re keen to keep it, you’ll want to be certain that it’s in good enough condition to make retaining it a viable proposition. If the existing house is no longer habitable, it may be smarter to start from scratch. There’s no point keeping a building that doesn’t have much life left in it, and it may not be safe to do so.
If you’re considering a second-storey addition, you’ll need to check the structural integrity of the ground floor. You may need reinforcement to carry the weight of the extension and that can be expensive. It may be prudent to order a building inspection so you have a professional report on the condition of your home. It’s important that home owners are aware of any urgent maintenance required regardless of any building plans. Finding out that information often tells a home owner what kind of renovation they need to do.
A building report will also provide an assessment of all the things that need to be brought up to code. You may need new lighting throughout, or new balustrades. There are rules in different councils about what you have to do to upgrade your existing house and it’s worth taking those into account.
5. Does my home have the right aspect?
Another consideration is the direction your existing home faces. Ideally you want to be able to get north-easterly and/or northern sunlight into the living areas of your home. If the home faces completely the wrong direction … a renovation may not be the best use of your mortgage.
6. Will I be overcapitalising?
I advise home owners to due their due diligence on home values in their neighbourhood. Is your existing home already close in value to the top amount payable in the suburb? Or is your existing home one of the smallest and crappiest in your suburb, with buyers scrambling to buy bigger, renovated homes?
It’s worth talking to a local agent, like myself about what your home is worth now versus what it would be worth if you renovated or built a new home. This process offers two benefits. First, the difference between what your home is currently worth and what it might be worth gives you an idea of the budget to set for your project so that you don’t overcapitalise.
Secondly, considering your home’s resale value temporarily removes emotion from your decision. I think that a lot of people who are doing family home renovations can’t even fathom that they might want to sell at some point. They worry that if they have to consider the next buyer they can’t create a home that feels like them.
But, for me, you never know what’s around the corner. You may get an unexpected job offer and need to move overseas. It’s your biggest financial asset and it makes financial sense to do the value check.
7. What kind of home owner am I?
Ultimately, you need to weigh up whether you’re someone who loves and wants to retain the character of their existing home and breathe new life into it, or someone who loves the idea of living in a home that is brand, spanking new.
The second type of home-lover is really attracted to the idea of living in a home that no one else has lived in before. They love the idea of ‘brand new’ and they love the idea that they can shape something to be exactly how they want it to be. Renovations can be more challenging than new builds, both love bringing new life to old homes.
I like taking something old and run down and turning it into something impressive. I think you appreciate the end result more.”