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Upgrading Your Home: Buy, Build or Renovate? [ULTIMATE GUIDE]

Everyone has different goals, different budgets, and different needs - so which will be right for you?
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This is the complete guide to upgrading your home.

In this new guide you’ll learn everything there is to know about buying, renovating or building your next home, including:

  • Key drawbacks
  • How to decide between buying, building or renovating
  • Real-life case studies
  • Advanced tips
  • Lots more

So if you want to make the right decision for you and your family, this guide is for you.

Let’s jump right in.


1. Don’t do what I did

Learn from my mistakes.

Figuring out the best way to upgrade your home can be a tough decision. There are a lot of factors involved, and to be honest it’s just as much of an emotional decision as a logical one.

I’m a big believer in making smart financial decisions when it comes to your home, but I also strongly believe in making decisions that ensure you’ll be happy in the home that you live in.

There’s no point in renovating if you don’t like the house you live in, or if the suburb has some major issues. On the flip side, there’s no point in moving home if you’re in love with your home and want to keep on making beautiful memories there.

building a home with bad weather

So, how do you decide?

Firstly, let me give you an example of what not to do.

The year is 2015. I just finished a gruelling, 12-month renovation on my property at the Gold Coast. I had the vision to turn my outdated house into a modern, open-plan home that would see me swimming in domestic bliss.

Unfortunately, my vision didn’t match reality. The renovation took twice as long as I expected and cost me twice as much as I’d budgeted for.

The extra cost and hard yards would have been worth it if the end result was what I wanted. But it wasn’t.

Just a few weeks after finishing the renovation, I was sitting in my new living room on a Sunday afternoon with my wife. It should have been a lovely evening, but I couldn’t stop thinking about everything I had done wrong during my renovation, and what I could have done better.

I realised that even after all that time and effort, I wasn’t happy with the house.

I ended up selling that house within 12 months.

Even worse, I had overcapitalised — the cost of the renovation was more than the value it added to the home. All that time, money, effort and stress down the drain

building a house brisbane

This was the finished product before I had to sell not long after finishing…

What did I do wrong?

I didn’t take enough time to plan out my upgrade. I jumped right into a renovation without considering my other options.

Learn from my mistakes. Take the time to think through all of your different upgrade options.


2. Should I Buy, Build, or Renovate?

Is your home starting to feel a little too small? Are a few minor flaws that are starting to really get on your nerves?

Or maybe you have a new baby on the way and all the bedrooms are full. Whatever the reason, it might be time to get an upgrade.

If you’re thinking about upgrading your home, you have four options:

  • Renovate your home
  • Buy a home
  • Build a new home
  • Knockdown/ Rebuild

They all have their pros and cons, and everyone has their own goals and purposes for upgrading their home.

Which one is best for you? 

Let’s step through these 4 options.

mortgage broker family


3. Renovating Your Home

Renovating your home is usually the first thing that comes to mind when you think about a home upgrade.

With a few years of property ownership under your belt, a bit of equity built up in your home, and maybe even a better financial situation, you start to notice the little flaws in your home that didn’t bother you when you first moved in.

If you are overall pretty happy with your home, renovating can be a great way to upgrade.

building house brisbane


Pros of renovating your home

It can be cheaper than buying a home

There are a lot of hidden costs when you’re buying a home, stamp duty being the highest cost of all. If you stay put and renovate instead, you can save tens of thousands of dollars on stamp duty, moving costs, and other fees.

You can use your home equity to finance your renovation

If property values in your area have gone up and you’ve been diligently paying off your principal and interest – or even better yet, adding extra repayments – you might have some considerable equity built up in your home. You can access this money via a home equity loan or a  line of credit to finance the cost of renovation. This means that you don’t need to have a lot of savings built up before you start the renovation process.

You get to stay put

Do you love your suburb? Are the kids happy in school? Are you close to friends and family? Is the house full of treasured memories, and you’d like to keep on making more? Does the thought of moving home make you shudder?

If so, then a renovation might be the right choice for you. Renovating your home means you get to stay where you are. You get to remake your home into your dream home without having to go anywhere.

home upgrading example

Most people are happy with their renovation

If you’re prepared to fork out the cash and do the work on your renovation, you’re probably going to be happy with the result. According to the 2019 Remodeling Impact Report by the National Association of Realtors, 74 per cent of owners have a greater desire to be in their home and 65 per cent have increased enjoyment in their home.

It can make your home more valuable

If you do eventually decide to sell your home, a well-done renovation can add significant value to your home. You get the benefits of enjoying the new kitchen, living room, bathroom, bedroom (or whatever you choose to upgrade), while you’re living in the home, and you can recoup most – if not all – of the costs of renovating when it comes time to sell. This is a win-win.

Read More: Kitchen Renovation Guide.

You know the property market in your area

I’m sure that you (like everyone else) want your house to go up in value. If you’ve been in your house for a few years, you should have a good idea of the local property market. This should make it easier to project what your house value is going to be like in the coming years.


Cons of renovating:


This is a term you may have heard before, and it’s one of the biggest issues you might face when you’re renovating. Overcapitalisation is when you improve the property beyond its resale value.

In other words, if you spend too much on your renovation, you might not be able to recoup the costs of your investment when you sell.

For example, if you spend $200,000 on home renovations but those renovations only add $100,000 to the value of your property, you have overcapitalised by $100,000.

This is especially a big risk when you’re considering a major structural renovation, and it’s why we recommend that you plan on staying in your house for at least five years before considering doing any major building work.

It can get complicated

Renovations are time-consuming, messy, and disruptive.

You might need to rent for a few months (or if you’re unlucky many months) while you’re waiting for major structural work to be completed. Your renovation can also be delayed due to material shortages and contractor delays.

In the worst case scenario, your builder might go out of business half way through the process – this can put you in a very messy situation.

new home

Renovations always costs more than you think

It’s rare for a renovation to actually meet its budget. If you haven’t allocated a large enough buffer for your renovation, you might end up in a sticky situation where your reno isn’t complete but you’ve run out of money. Stressful!

You need to be crystal clear with your builder about what you want, and always make sure to budget at least an extra 15% for unexpected costs.

This is why you should speak with your Mortgage Broker to make sure you can afford any cost blow outs should you need to borrow a little more from the bank.

Renovations have their limits

Depending on your house or apartment, land block, and council regulations, your ability to upgrade your home could be limited. Smaller houses and apartments give you less options for renovation. You may find that your current property simply can’t accommodate the changes you would like to make.

Are you prepared to live in a construction site?

Whatever room (or rooms) you plan to renovate, remember that those rooms will be out of commission while the renos are underway. This can be a major disruption to your daily life.

For example, my parents recently did a major renovation on their home and had to spend 3 weeks “showering” in their kitchen because both bathrooms were out of commission.

During renovation, your house will be noisy, dusty, and there will be strangers coming and going at all times. Are you prepared to suck it up and deal with the inconvenience? If not, you will need to plan (and budget) for staying somewhere else while the renovation is happening.

Sometimes, it’s just not possible

If your house has major existing structural issues or other problems, you might not be able to renovate at all. In cases like this, there’s no sense in throwing good money into a property you know has problems. You’re better off moving to a new home.


4. Buying a home

Buying a home is the next most common choice we see for home upgraders. And it’s often the better choice.

As we covered above, renovations can be stressful and time-consuming. It’s a lot simpler to buy a place that has everything you’re looking for.

This is especially true if you don’t like your current home for any reason.

buy or build

Read More: Building a Home In Brisbane


Pros of buying:

There are no surprises

If you’re renovating your home, there’s always a chance that the final result isn’t quite what you pictured. That’s what happened to me when I renovated my Gold Coast home in 2015 When you’re buying a house, there’s no surprises. If you do your due diligence and get all of your building, pest and other inspections done like you should, then you can be pretty confident that what you see is what you’ll get.

Less disruption to your daily life

Renovating can be messy, noisy, and just generally a pain in the a***. When you buy a house, there is still going to be some disruption thanks to the “joys” of packing and moving home, but it’s a known quantity. There will be a couple of weeks of chaos but it should be smooth sailing the rest of the time.

A chance to declutter

When you start packing for your move, you start to realise how much random crap you have around the home. There’s no point in packing all that useless stuff just to unpack it and have it take up space in your new home. Moving into a new home is a great opportunity to declutter and get rid of old clothes and other items that you no longer need.

It’s a fresh start

You know what they say – a change is as good as a holiday. Moving into a new area can give you opportunities to become part of a different community, explore new places and expand your social network. You might be able to get access to better schools for the kids, or buy a place with some great local facilities to make your everyday life more enjoyable.

You know how much it will cost ahead of time

The costs of renovating and building almost never meet your expected budget. This introduces a fair bit of uncertainty which many people don’t feel comfortable with. When you’re buying a home, the costs are known. This makes it a lot easier to budget and can reduce a lot of stress.

It’s a lot less work

With your other options, you’re going to be facing a lot of extra work. Discussions with builders, planning, organising contractors, and everything else takes a lot of time and effort. If you’re buying a home, you’ll still need to do a bit of work, especially during your research phase. But I guarantee you it will be a lot less work than renovating or building.


Cons of buying a home

Finding the right property takes time

It might be simpler and easier than building or renovating, but buying a home still takes time and effort. You’ll need to spend some time doing your research, going to inspections, and everything else. You can expect to miss out on a couple of “perfect” homes during the process, and there’s guaranteed to be a few false starts.

Additional costs

Depending on your situation, buying a home can work out to be more expensive than renovating. You’ll need to consider the costs from both sides: buying your new home and selling your old one (unless you choose to keep it as an investment), or even stamp duty on a new home. These costs are avoided when renovating.

buying first home

Getting the timing right can be tricky

If you’re selling your old home, you’ll need to decide whether to buy first or sell first. Both have their advantages and disadvantages, but either way the timing can be a bit tricky. If you get it wrong, you might have to sell your existing home for less than you wanted. This can then have some flow-on effects with your ability to finance your new purchase.

Moving to a new area can be tough

If you have kids in school, they’re going to need to make new friends and this can be especially tough as they get older. Even if you don’t have children or they’re at a young age, you might find it a bit challenging at first as you get to  know your new area and neighbours.


5. Build a new home

Building a new home can be an exciting opportunity for home upgraders. After a few years living in your current property you will have a good idea of what you do and don’t like. You’re much clearer about what features matter to you, and which ones you don’t care about.

Imagine being able to walk into a brand-new home built to your specifications, in an amazing suburb with all the amenities you had dreamed of. Building a home is exciting, but it’s not without its drawbacks.

first home builder grant


Pros of building a new home

Build the house of your dreams

When you’re building a new home, you’re in control. If you can’t find anything on the market that suits you, why not build it exactly how you want it? The sky is the limit (as long as your finances support it).

Save on stamp duty

When you build a home from scratch, you only need to pay stamp duty on the land, not the house. This is also true if you move into a newly-built home that has never been lived in before. As mentioned earlier, stamp duty is one of the largest costs you’ll face when buying a home, so this can translate into a big saving.

Time it right and it might be cheaper

If you’re willing to buy off the plan, you might be able to find lower prices on offer in the first stage of sales for a new development. Developers have a quota of properties they need to sell off the plan in order to get finance and begin construction, so they often offer an enticing deal to the first people ready to take the plunge.

New homes are typically more energy-efficient and environmentally-friendly

New homes are made with brand new materials and come fitted out with new appliances, so they tend to be more energy-efficient. Think beyond the initial costs and look at the future. With a new, energy-efficient home you could be saving money (and saving the planet) in the long run. If you’re a bit of environmentalist, you can go the extra mile and build your home out of eco- friendly materials and choose a home design that is eco-friendly.

building home


Cons of building a new home

You may need a higher deposit

You may need a higher deposit to get a construction loan than you would need to buy an existing home. If you don’t have a lot of savings or equity in your current home, you might have trouble making it happen.

Building takes time

When you build it takes time, and you’re virtually guaranteed to get some delays somewhere along the way. The Australian Housing and Urban Research Institute

AHURI says it can take up to 7.5 months on average to construct a new home from scratch.

This can sometimes cause some issues with your financing. Many home lenders restrict borrowers by requiring that the house must be completed or at least begun within a certain timeframe from settlement, usually ranging from 6 months to 24 months. If you can’t meet those time restrictions you may need to arrange an extension.

The cost is not fixed

When building, your costs can spiral out of control if you’re not keeping an eye on what is being spent and where. You’ll need to make sure you check your builder’s contract carefully to make sure it includes everything you need.

When buying off the plan, make sure to ask a lot of questions about the display home that you see. You don’t want to find out that the beautiful tiles and light fittings used in the display are not included as standard and end up with cheaper versions in your home.

You should also be aware – if you need to make any modifications to your plan mid-way, it’s going to cost you. Changes made midway through construction can incur additional costs such as:

  • Drafting fees
  • Penalty fees from the builder Legal fees to alter the contract Extra materials
  • Extra labour

There’s more paperwork involved

When you apply for a construction loan, you’ll need some additional paperwork beyond the standard income payslips and bank statement. You’ll also need to provide copies of building permits, building contracts, building plans, and building insurance. On top of this, you’ll need to keep your lender updated along the way about any changes to the building plan, costs, or contracts.

renovating or building

It can be overwhelming

There are a lot of choices to make during the building process. Finding the right block of land, choosing your building plan, fittings, fixtures, landscaping… the list foes on.

You’ll have to do all of this and stay under your budget. Managing all the details that go along with building a home takes time and effort. Don’t underestimate the depth of stamina you’ll need to make sure it’s all done the right way. It’s a lot to handle. If you’re not crystal clear about what you want, you might get overwhelmed.

New neighbourhoods

New houses are built in undeveloped communities more often than not. That means there may be less amenities nearby, smaller yard sizes, and a closer proximity to your neighbours.

If landscaping isn’t included in the cost of the house, you might have to deal with mud and dust in the backyard until you can afford to have it landscaped.

You should also think about timing. If you’re one of the first houses on the block, you might be living in a construction zone for months, or even years, until the community is fully established.


6. Knockdown/rebuild

If you love your location, but don’t love your house, it’s worth thinking about a knockdown/rebuild. This is when you demolish your current home and rebuild on the same block of land. Knockdown/rebuilds are becoming an increasingly popular option in Australia.


Pros of a knockdown/rebuild

Change your living space without changing your address

If you’re living in a street you love, with great neighbours and a great neighbourhood, a knockdown rebuild can be a great choice. You get to keep the benefits of your location while upgrading to a brand new house.

Retain the value of the land

The value of your land is much higher than the value of the house that sits on top of it. If you’re sitting on a good block of land, a knockdown rebuild allows you to retain that value.

Full creative control

Much like building a new home, you get full creative control with a knockdown/rebuild. From the orientation of the house to the layout design, and styling, it’s all in your hands. You get to build your dream home.

home upgrade family

It may be cheaper than buying or renovating

Sometimes it’s easier to start from scratch. If you’re looking for a major renovation, with a budget into the hundreds of thousands, it can be cheaper to knock down the house and start with a clean slate. Depending on what you’re looking to achieve, it can even be cheaper than building on a new block of land.

Minimal maintenance

A new home is simpler and easier to maintain than an older one.


Cons of a knockdown/rebuild:

You lose the character of the original building

If you’re living in a heritage building area, knocking down your home and building a new one might not be your best choice. Assuming you can get approval from council, you may find that buyers in your area are less interested in the only modern home on the block when it comes time to sell.


As with building new, a knockdown rebuild takes time. And there’s going to be delays. You’ll need to make sure you’re prepared for this.

Need for alternative accommodation

If you’re doing minor renovations, you may be able to stay in your home while the reno is going on. Or if you do need alternative accommodation, it may only be for a short period. If you’re doing a knockdown rebuild, you can expect to be living somewhere else for 6 months. You’ll need to factor the cost of this into your budget.

should i upgrade home

Council approvals

Getting approval can take a lot longer when you’re doing a knockdown rebuild compared to building new. For example, a two-storey home can be difficult to get approval in an area where there are mostly one-storey houses. You will also need to take into account design or heritage restrictions. This can make it challenging (or even impossible) to build the home you want.

Hidden costs

There can be many hidden costs associated with a knockdown rebuild. If you’re on a flood plain, you may need to pay for flood mitigation. You might need to pay for an extra electricity pole, need traffic control for deliveries, or need a bushfire report. Make sure you budget for a big contingency fun for the inevitable extra costs that pop up.


How to decide what’s right for you

Now that we’ve covered all the pros and cons of your different upgrade options, it’s time to decide.

Here’s how:


Do you love where you live? Or do you loathe it? Make a list of the good and bad things about your current location. This can include:

Commute times Local facilities Neighbours

Proximity to family and friends The character o the suburb

If you’re happy with where you are, I’d recommend looking into renovation or a knockdown rebuild. If you don’t like your location, there’s no point in staying where you are. Either buy or build depending on your preferences.

Your current home

What do you enjoy about your current home? Is it full of happy memories? Would you like to make more? Think about the design. Which parts do you love, what irritates you. What do you wish were different?

If you can’t bear the thought of leaving your home, go for a renovation. If your home holds no special place in your heart, you can either buy, build, or knockdown rebuild.

how to upgrade home

Your timeframe

Can you see yourself staying where you are for the next five years? Or do you have another place on your mind? Are there any major life events coming up?

If you’re thinking of renovating, you should be prepared to stay put for a few years at least. When you renovate you put yourself at risk of overcapitalistion. The cost of your renovation may not translate into an equal increase in the value of your home.

If you’re ok with waiting for 6-12 months (or more) before you upgrade, you can build or knockdown. If you’d like to find something bigger ASAP, you’re better off with buying.

Your personality

Do you enjoy planning, negotiating, creating, making choices? Are you someone who likes to get involved in the process? Or do you prefer that things are already done for you?

If you want full creative control of your new home, I’d suggest you build, renovate or knockdown. If the thought of making too many choices makes you spiral into a panic, then buying is your best option.

mortgage broker

Read More: Renovation Loans


Summing it all up

Everyone has different goals, different budgets, and different needs. There is no “one size fits all” when it comes to choosing how to upgrade your home.

I’ve given you a detailed breakdown of the pros and cons of each option for upgrading your home, and a few recommendations based on common situations.

Now it’s up to you. Take some time to think this through, and assess your options. Which option would make sense based on your reasons for upgrading? How about your budget?

Whatever you decide to choose, when you’re ready, we’re here to help you finance your home upgrade.

Contact us now for a free assessment.

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