DECIDING WHETHER TO MOVE OR IMPROVE

Determine your goals

The first step to deciding whether to move or improve your home involves working out what you want to achieve. Is the reason for wanting a change a financial, or a lifestyle one?

Each option has a different effect on your financial situation. Improvements may cost more up-front, but can increase the value of your home. Lifestyle reasons may include the need to change your location, or your living space. If you love the home and area you are in but need more living space then improving your existing home may be the option. Alternatively, if you need a change of scenery then moving might be the best solution. Even lifestyle choices should be considered in light of their financial implications. You may need more or different living space to accommodate a change in lifestyle. This lifestyle goal could be achieved by improving your existing home, or through moving - the final choice could come down to finance.

The next step is finding out if your ideas or dreams can be achieved, and if the financial outlay is actually worth it.

To help you come to a conclusion, consider the following information:

Moving

Moving home is a big step, so you need to be sure that it is the right option.

Advantages

When you build a home you have the benefit of a design of your choice. If you need another bedroom or bathroom, you can include this in the design of your new home.
Building gives you the luxury of living in a brand new property. You won't need to worry about spending money on improvements to the structure of the house.
When you buy an existing home, you may not have the freedom of design but you have freedom of location - you can choose a location that meets you and your family's needs.

Disadvantages

The cost of moving to a new home may actually be prohibitive for many. In addition to the price of your new home, you need to consider stamp duty, loan fees, real estate agent commission, and the cost and time involved in moving all of your possessions.
You will need to go through the process of selling your existing home and buying another, which can be very time consuming.
Moving and setting up in a new neighborhood requires a lot of time and effort. It may require changing things like your children's schooling arrangements, various memberships and so on.

Improving

Advantages

One of the most obvious benefits of improving is that it allows you to remain in your house and area.
Certain types of improvements can add significant value to a home, thus increasing its resale value should you choose to sell further down the track.

Disadvantages

Living through a home improvement can be difficult. If it requires significant construction you may need to consider temporary rental accommodation.
Home improvements can be expensive, so you may need to arrange finance.
Home improvements bring about the risk of over capitalization. This occurs when the cost of your renovations is greater than the market value they add to your home.

Weighing up the options

If you haven't been able to come to a decision, go through the following process. Considering all of this information will help you to make a decision that is the best fit for your finances and lifestyle, rather than simply relying on one of these aspects alone.

Compare the advantages and disadvantages of each, and how they relate to your reasons for needing a change.
Work out the costs by doing a budget.
Once you have an understanding of what you can afford, draw up some rough plans of your renovation. This will help you establish your home's true potential.
Get a quote from a builder or architect, and advice on whether your renovation is possible given your home design. You may find that you will encounter council restrictions, or simply cannot achieve what you have planned. You may also find the cost to be prohibitive, and that moving to another area you like is the better alternative.
Get an indication of the price of homes in the suburbs you wish to move to, and get a free appraisal on the market value of your home.