Planning ahead

What are your current and future needs?

Setting out your short and long-term goals is the critical first step. Be clear about where you are now, and where you plan to be in five or 10 years.

"It's important to take a long-term view of your property journey," says Michael Yardney, Chief Executive Officer at Metropole Property Strategists, opens in new window.

"Do you want to be near friends, family, amenities, work? Will your family get bigger? Will your income grow to open up the possibility of upsizing, or is there a chance it could shrink due to you or your partner moving to part-time work?"

Are you already in your dream location?

If you’re living in a location you love, it might be better to update and stay put, rather than selling in the hope of moving back later. It could come down to where your heart and finances are at.

"The old saying ‘location, location, location’ should be a top consideration when making this decision," says Sally Zelman, Director at Gary Peer Real Estate, opens in new window.

"You need to look into where you want to be in the next 10 years. If you're in a financial position to improve your location to somewhere that will return a higher property value in the future, then it will be more rewarding and you'll reap the benefits. If you're already in a premier location or have limited funds, consider renovating."

Of course, you might consider convenience or lifestyle more important than the best return on your property – so make sure you’re changing up your home arrangement for the right reasons.

With everything weighed up, it’s also worthwhile mapping out the must-haves of your dream home versus the nice-to-haves, and whether they’re something you can achieve in your current place.


What's the state of your current home?

If you’re renovating with a view to sell, make sure your home is a suitable candidate – updating old homes can be costly and take some time. Look beyond the floor plan to check hidden elements like wiring, plastering and stumps.

On top of this, be sure to call in the professionals early to understand the task at hand. Architects, building inspectors, builders, electricians and engineers will give you an idea of the scope of work to be done, and cost estimates for complex tasks like moving walls.

"The criteria for renovating is based on the following: budget, flow and structural integrity of the existing residence and orientation," says Nick McKimm, Director at McKimm, opens in new window, a residential design practice in Victoria.

"It's best to avoid undertaking major renovations if you intend to sell straightaway. Focus on non-structural areas that are less expensive, but will have the biggest impact. Make sure you’re maximising the flow and benefit of the house."

If you’re renovating with a view to your needs beyond the next two to five years, more sizeable undertakings might be more appropriate. Either way, talking to professionals and weighing up your budget are the best places to start. We’ve also got plenty of tips on how to finance a home renovation.

How much should you spend?

Do your best to spend appropriately and avoid overcapitalising: your expenses being more than what you’re likely to get if you had to sell tomorrow.

"If the renovation is for a short-term period you should think very carefully about the costs involved," says Zelman. "Would you get a positive return on your outgoings if you needed to sell at any time? If this is for long-term living, you should consult a competent real estate agent who’ll give you the best advice on whether the project will be a financial gain in the future."

Make sure you know your property's real value before deciding on a fitting budget.

Will your renovation suit your neighbourhood?

In addition to meeting your needs, consider how the new look and layout of your home will appeal to future buyers typical to the area. For example, if your house isn’t close to any schools, creating a family-friendly home might not be top priority.

McKimm also lists three important things to maintain value: an attractive facade, good orientation, and sound structure. "Always try to purchase a house that won't be difficult to renovate," he says.


Can you turn your current home into an investment?

"If your property is well located and you can afford to hold it, it may make financial sense to borrow against the equity of your existing property and use this as a deposit for your next home," says Yardney. "You’ll then own two properties, which can increase in value and grow your wealth over time.” See how much you can borrow with our equity loan calculator.

"The good news is the holding costs for your investment property could be subsidised by your tenant who’ll help pay your mortgage through rental payments.”

Bear in mind, even though your property may have increased in value over time, your borrowing power may be affected by any change in your income. Turning your home into an investment is also likely to mean paying capital gains tax.

Learn more about tax implications you could face, opens in new window, and how to build and use the equity in your home.

Are your relocation options a good fit for you?

Consider if your new home or area has potential to grow. Does it meet all your current and near future needs? Is it close to shopping, parks, public transport and any other non-negotiables you’ve decided on?

What are the costs? Weigh up all the costs of buying a new home beyond the property’s price, like stamp duty and conveyancing fees. Know the upfront costs of buying a house and get to know how capital gains tax is calculated.

What is 'rentvesting' and is it an option?

"If your budget doesn't allow you to buy the type of home you’re after, it may be worth considering rentvesting. This means renting somewhere you’d prefer to live, and buying an investment in another location you can afford," says Yardney.

If you’re buying up, be realistic about the type of property your budget will allow – and how big a loan you can afford. Check out useful tips for buying an affordable home, and get an estimate on what your loan repayments could be.

How can you get your home noticed and sold?

If you’ve decided to relocate, put extra effort into presenting your home for a successful sale. A cosmetic makeover and minor repairs could be what seals the deal. Check out our tips on how to how to get your property ready for buyers.



An amenity (in real estate) is a desirable property feature that’s likely to add value. An amenity can be anything from a walk-in wardrobe to a swimming pool, as well as less tangible things that come with the property, like great views or noteworthy nightlife.


The legal process of transferring ownership of real property from the seller to the buyer.

Capital gains tax

Capital gains tax (CGT) is a tax applied to the capital gains you make on a property or asset. The capital gains amount is the difference between what you paid for a property or asset, and what you sold it for.


The part of your property that belongs to you and not the bank, i.e. the value of your property minus the outstanding loan amount.


Overcapitalising occurs when the cost of a renovation outweighs the value it adds to a property, and can’t be recouped at sale.


Rentvesting means renting somewhere you’d prefer to live, and buying an investment property in another more affordable location.

Stamp duty

Stamp duty is a tax you pay to the state or territory government when you buy a property.

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The information contained in this article is intended to be of a general nature only. It has been prepared without taking into account any person’s objectives, financial situation or needs. Before acting on this information, NAB recommends that you consider whether it is appropriate for your circumstances. NAB recommends that you seek independent legal, financial and taxation advice before acting on any information in this article.