When you’re re-financing to renovate, it’s important to spend your money wisely. For the average family home looking to create extra space, the two main choices are extending upwards or outwards. But before you start, there are pros and cons for each that are important to consider to help you choose the one that suits your lifestyle needs and financial goals.
Renovating is one of the favourite past-times for many Australians, with about one-third of Australian home-owners renovating every 5 years.
The chances that you, or someone you know, are renovating – or at least thinking about renovating – are very real. And if that’s the case, the question about whether to go up or out, is one you’ve probably considered carefully.
To help you decide what the best renovation for you is, check these insights.
In general terms, extending upwards is more expensive than extending out.
So, if you have a vision for fantastic fixtures and fittings, or other add-ons, such as a swimming pool, or spa, you might need to crunch the numbers to see how you can tick most of the renovation goals you have – and stay within your budget.
Anything to do with your home can be very emotional but when it comes to renovation, it’s important to focus on the numbers. Yes, you love your home, but you also want it to be a smart investment – so be careful not to over-capitalise with an overly expensive renovation, especially if you plan to sell within a certain time-frame.
Building an upper-storey extension has more benefits than just added space. Second-storey additions can bring more light into your property – and it will save your current garden.
With an added storey, you’ll also have the potential to enjoy better views and, depending on your location, this can add real value to your property.
Just remember that you will lose some of your downstairs space for the staircase entrance.
Although some builders promise all-weather work, removing the roof while you deal with an upper-storey extension can be problematic – especially in wintry, wet months. Many outward extensions enable you to live in the property while the work is being done. If your upwards extension means you need to clear out for a while, make sure you add the costs associated with your relocation into your assessment of what will work best for you.
Second-storey additions add extra weight into your home – so that can mean extra support to ensure your home stands up to the pressure. Some older slab homes or cheaper package homes are not built to stand up to the extra load. Get a few different opinions from professional builders to get an opinion you can trust – any error here can be very costly, and dangerous.
With a wide block at your disposal, you can add to the street appeal of your property with a thoughtful extension. You can keep your original roof – something that saves money – although you will need to match the new section with the existing one and if you scrimp, it can look really terrible.
Again, depending on the extent of your renovation, factor in the costs associated with having to move out and live elsewhere (and store your belongings) if your renovation means there is no way you can live there with the builders.
If your block is one that slopes, be sure to include excavation costs into your renovation budget – these can be costly.
Whether you decide to go up or out, any renovation work can be expensive.
No matter what building work you decide to do, smart renovators keep a buffer of at least 10% to cover any unforeseen costs due to problems that invariably crop up.
Refinancing your existing mortgage can be a great way to access the funds you need to enjoy the renovation of your dreams.
Seeking multiple opinions and talking to friends who have already undertaken renovations you like is a good starting point. Your home really is your castle and getting it right is an investment in your happiness – as well as your financial security.
If you need advice for a personal loan, home loan, business or commercial loan, self-managed super fund loan, or an investment home loan, speak to a broker at Lending Specialists. We have a wealth of experience under our belt and a robust network to connect you to the right industry professional for the loan you need.