Do you reinvest in the familiar or start from scratch? Knowing when to renovate an existing home or purchase a brand-new property can be challenging. Sentiment aside, nobody wants to run the risk of sinking funds. There is an overwhelming balance of advantages versus disadvantages for both options.
Whether you ultimately invest in a new build home or fork out on hefty renovations, here are the primary differences to weigh up.
Benefits of renovating
Renovating could be the smarter route for you. There are three primary benefits of renovating: cheaper purchases, added value, and bringing visions to life. Here’s a deeper dive:
- Properties that require minimal renovations (coined doer-uppers) might be cheaper when acquired significantly below market rates.
- Renovation projects are suitable ‘flippers’, where investors add value and cash out profit by reselling.
- Renovations can bring unique dreams to life, which is valuable for buyers struggling to see their precise vision on the market.
Potential drawbacks of renovating
Depending on the project scope, renovations can prove more expensive than constructing new houses from scratch. In general, it’s a question of how much added cost and time you can comfortably factor in.
- Renovations are often time-consuming, not just for the work but because of the safety and structural sign-offs required. 6 to 12 months is the norm, and some projects may take longer.
- Costs are a major factor, with prices commonly rising to £15,000 per room. Even if you plan to tackle renovations DIY-style, it’s worth considering the loss of work hours and the material prices.
- Issues arise quickly — and cause massive headaches. Leaky pipes or faulty water pressure resulting in a burst? A bust boiler? A rough-around-the-edges property comes with high maintenance demands that can add extra stress.
Benefits of new builds
Veering towards investing in a new home? These blank canvases might involve lengthier waits to pick up the keys. However, there are some huge benefits.
- The marketing timelines are savvy; despite the lengthy construction periods, developers typically time their advertisements so buyers can move in promptly.
- New builds eliminate the stress of chains, meaning fewer headaches and risks of deals falling through.
- As a blank canvas, a new build home sets you up for immediate success, granting more creative control over the layout and design.
- For long-term buyers, better energy efficiency reduces expenditure on utility bills.
Potential drawbacks of new builds
Everything has a pitfall if you think hard enough. New builds are typically more effective purchases in terms of quality and immediate satisfaction, but there are some drawbacks.
- The higher upfront cost does reduce the potential for substantial profit. New builds are less suitable for short-term investors and those looking to flip properties.
- New homes can still suffer from quality issues but they do often come with warranties that will address any structural issues.
