Consumer Information

Author : Homeloans SA

You family has outgrown your home – Renovate or Relocate

Life is a Circle – at some stage in your life your home becomes too small when the children arrive and all require their own space. At a later stage in life they start leaving the family home and all of a sudden the house is too big! We will leave that life stage for later and concentrate now on the choices you have when your house becomes too small.

To extend the family home or to sell and move to a bigger house

You basically have two options – upgrade your home by adding on an additional room or two, or, sell your existing property and move to a more suitable house. Your choice will be influenced by many factors, for example:

The money you have available:

Always start any decision involving money by drawing up a budget – whether you extend your existing house or sell and move to a new house, work out a budget for both so that you can compare.

Will you require a bigger home loan?

Whether you are looking at renovation or relocation – you may require an increase in your existing home loan or a new home loan. With the National Credit Act obtaining new credit is not an easy task; make sure that you will qualify before taking steps to buy and sell.

Things to consider when selling old and buying new:

1. Commission to the agent who sold your house.
2. Moving costs.
3. Transfer and bond costs for your new house, bond cancellation costs for the old house, capital gains tax, electrical and beetle clearing certificates.
4. Utility deposits, cost of decorating the new house, security installations, cabling for computers and Satellite TV.
5. Time and effort!! – Changing your address, children’s schools to name but two.
6. What has happened to the property market in your current area? Will it be a wise decision to sell now?
7. The process of buying and selling will cost more than renovating your existing home. (in most cases)
8. If you buy brand new you also need to consider the cost of establishing a garden from scratch. This could be a very expensive exercise.

Renovation and Extension

1. The first thing to remember is that extensions and/or renovations usually cost much more than you have anticipated.
2. Decide exactly what you want done; there will be the cost of plans that needs to be approved.
3. If you want to make major changes you may end up paying more than buying a new house. (This will be the exception to the rule and will only apply if you really want to change the entire house.)
4. Obtain more than one quote of what is would cost. List every detail, such as the finishes, fittings and quality of material you want to use.
5. Bear in mind that your garden will be damaged, depending on the outlay of your property.
6. You need to be careful not to over-capitalize on your property – spending a fortune, in an area where houses do not reach the price you will have to sell at, would be foolish. Once your renovations are costing you more than the value it adds to the property’s current market value you are over-capitalizing. Over-capitalization can be dangerous – you may sit with a “mansion” in an area where no-one in that price range will ever buy.
7. Location is everything.

TIP: Remember to adjust your homeowners and householder’s insurance to include the value of the extensions

Make a list of the pros and cons of both options

Consider the following:

1. Are you happy in your current environment? Are there changes taking place that may influence the value of your property as well as the living conditions?
2. Is it a “good” neighbourhood where property prices have grown steadily?
3. Safety concerns could be a major consideration.
4. If you have children good schools in the vicinity becomes another major consideration.
5. Living in a house that is being renovated calls for huge patience and putting up with some major discomfort – depending on the type of renovations. Redoing a kitchen or bathroom is a totally different story compared to building on an extension of one or two rooms with an additional bathroom. It’s referred to as the “hassle factor” and not without good reason.
6. Are you after a total change in lifestyle? Then renovating may not be an option.


Whatever option you choose – don’t do so in a hurry. Being able to call a house a home does not depend on the size but on the happiness it brings to the people who occupy it.