Renovate or relocate?
Weighing up the smarter property investment
REMAX Southern Africa shares their tips on how to decide whether it is worth renovating your existing home or buying a new home.
For homeowners caught between staying put or starting fresh, the decision to renovate or relocate is more than just personal preference; it’s a question of smart investment.According to property experts at REMAX Southern Africa, the answer lies in understanding where the better return on investment (ROI) lies, and which option holds the most potential for future house price appreciation.
“The choice between renovating and relocating hinges on a homeowner’s financial goals, the state of their current property, and market conditions in both the current and potential new neighbourhoods,” says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.
For example, he explains that in an area with slow house price appreciation, selling and upgrading could yield a better price than investing in a stagnant area. Conversely, in high-demand suburbs with little stock, he recommends that upgrading your current home might be the best way to ride the property value wave.
Another aspect to consider when weighing up whether to renovate or relocate are the transactional costs of buying a home, such as transfer duties, legal fees, and commissions. These can typically total to around 7-10% of the purchase price. “These costs can offset short-term gains unless you’re upgrading to a home with more upward value potential,” Goslett cautions.
Strategic move
On the other hand, home renovations can be a strategic move, especially in an area with stable or rising property values. Updates to kitchens, bathrooms, and open-plan living spaces can significantly increase the appeal and value of a home. However, Goslett warns that the key is not to overcapitalise.
“Spending more than what the neighbourhood can support in resale value may mean losses down the line. Homeowners should also consider the cost of temporary accommodation during extensive renovations, and the unpredictability of construction timelines, which may erode ROI if not carefully managed,” he notes.
Beyond financial returns, homeowners must consider how well their current property supports their day-to-day life, and whether they could afford to buy a new home if they want to remain in the same suburb (perhaps because of schooling, work commutes, or family). When a home’s footprint simply cannot accommodate the household’s evolving needs, Goslett says that relocating may be the more practical and cost-effective solution. Similarly, if you have to remain where you are, then renovating is perhaps the best solution.
When it comes to making this decision, homeowners are advised to speak to a professional real estate agent before making a final call. “A Comparative Market Analysis (CMA) can give insight into your home’s current value, while a property investment consultation can identify suburbs with promising growth. Our agents can then guide you towards the most financially sound decision — whether it’s breaking ground or packing boxes,” says Goslett.