Should I Rebuild or Renovate? 

When looking to purchase property,  clients often ask, “should I rebuild or renovate?”  Each option has pros and cons, so here are some things to consider when deciding whether to rebuild or renovate. 

Rebuild or renovate – what’s the difference? 

It’s important to know the difference when it comes to rebuilding or renovating. 

Knockdown and rebuild: 

A knockdown and rebuild job is when you completely demolish the existing building and build a brand-new home in its place. This could be a custom-designed home or a project home.

Renovate: 

In comparison, renovating refers to updating, repairing, restructuring and/or extending the existing home without knocking it down entirely. Renovations are custom-designed as they must work with the current house.

How to decide whether to rebuild or renovate

If you’re looking at your property and aren’t sure whether to knock down and rebuild  or renovate, here are a few things to consider: 

Work out what’s more affordable

Deciding if rebuilding or renovating is cheaper may impact your decision if you’re on the fence. The cost of renovating will depend on whether you’re planning an extensive renovation with significant structural changes to the building. If this is the case, it may be cheaper to start from scratch. Rebuilding may also be easier as you can put your own personal touches into the build, whereas with renovating, you’re often limited by the existing parts of the house as to what you can do. 

These costs aren’t all superficial, though. When figuring out the price, it’s important to consider how future costs will impact you. Generally, new homes are easier to maintain, less susceptible to termites, and more energy-efficient. They also come with added peace of mind in the form of a construction warranty, which is why you might be better off knocking down and rebuilding if you want to make significant changes to your home.

Consider how old the house is

Think about the age of your home. If you live in an old house with beautiful timber floors or decorative ceilings, these are often hard to replicate in new builds. If there are features of your home that you want to keep because they are rich with history, renovating may be a way you can hold on to this heritage. 

Assess the market conditions 

Getting advice from a professional can help you make your decision. For example, sometimes it’s better to knock down and rebuild in locations where vacant land is scarce and in high-demand areas close to the city, beach, or bay, where there is less risk of overcapitalising (when the cost of your rebuild outweighs the market value it adds to your home).

Evaluate the block 

Some blocks are much harder to build on than others. For example, knocking down and rebuilding on a flat block is often much cheaper than knocking down a property on a sloping block. You may also need to deal with negotiating boundary setbacks, problematic vegetation, and local planning laws. Every council will also have specific rules around building and renovation, so it’s important to check first before you have your heart set on one. 

Consider the hassle of renovating

Lastly, you’ll need to consider particular logistics if you’re thinking about renovating. If you have a family or work full time, think about whether having builders constantly in your house is something you want. Even though a renovation may be the more appealing option to a rebuild in some aspects, the added disruption may mean it’s not worth it. 

If you’re still sitting on the fence, here are some pros and cons that may help you decide. 

Pros and cons of a knockdown rebuild

Pros:

• It can be cheaper in some circumstances 
• You will have fewer unknowns as there will be no older structures and potentially dated building practices.  
• You might have a better market value depending on where your block is located. 
• New homes are often easier and cheaper to maintain.
• Rebuilding your property may allow you to make your home more sustainable due to the selection of design materials. 
• It can potentially be easier to obtain financing with a construction loan.

Cons: 

• Depending on the design, you’ll need to find temporary accommodation for roughly a year (including moving costs).
• There can be significant costs associated with a knockdown rebuild.
• Knocking down a home means more waste is going to landfill than if you renovate.
• Rebuilding can mean removing memories/milestones from that house(e.g. bringing home your first baby, marking your kid’s height on the wall, buying it as your first home, etc.). 

Pros and cons of renovating 

Pros:

• Renovating means you can keep the character and quirks of an older home.
• Many buyers prefer an existing home if it’s been well-maintained. 
• Renovating an existing home means less building waste ends up in landfill.
• Renovation or partial knockdown may be all that’s necessary. 
• You may be able to move back into your home sooner.

Cons: 

• Depending on the existing structure, you may be limited in what you can do.
• It is hard to predict what complications you’ll encounter during a renovation.
• A renovation tends to cost more than a knockdown rebuild if you’re renovating the entire house.

So, which one should you choose?

When choosing whether to rebuild or renovate, follow these steps: 

• Check the planning and development regulations. This means following up with your council or area to see if you can knock down your home and what you can do with your land (e.g. subdivision may be possible). 
• Do a value check to see what’s happening in the market. It should be pretty easy to tell from current and recently sold listings if renovated or new properties are selling for more. If you knock down and rebuild your property, you may unintentionally decrease the value of your home. 
• Weigh up the pros and cons – especially the financial and emotional toll each option can have on you. 

How can an Inovayt professional help me decide whether to rebuild or renovate? 

If you’re on the fence about rebuilding or renovating, our team of professional mortgage brokers are here to help. We work with you to understand the nuances of each option while navigating the complexities of the finances involved. If you’re ready to give your home a makeover, our team is here to help.