As your life changes, so do your needs and wants in a home. You might be finding the kitchen too small, or there might not be enough bathrooms to accommodate you, your partner, and your (now) teenagers that take far too much time to get ready in the morning. You might simply have outgrown the space! These are all signs that your home isn’t keeping up with your lifestyle, and it might be time to either rent it out and move on, renovate it to fit your needs now, or to sell and find something that suits your family better.

The two very different sides of renting

There are pros and cons to renting out your property, and we’ll take a look at some of those here.  

Property is a growth investment, so capital gain is a good reason to hold on to your home and possibly look into renting it out and using that as a secondary form of income. Plus, if you’ve owned your home for a while and/or have made significant improvements, it has probably grown in value, which can also mean higher rental rates and returns.

You’ll be relying on someone else to take care of your home and treat it like you would yourself, which isn’t always how other people see rental properties! Plus, depending on the state of your home, having to maintain your property for tenants can be a real thorn in your side! Some Kiwis love to DIY, and if that’s you, it’s easy to save on maintenance costs by doing things yourself. However, if you or your partner don’t have that handy streak, it can end up costing you more money than you might think.

New healthy homes standards and requirements for landlords in New Zealand under the new Residential Tenancies Act mean it’s not as straightforward to own an investment property as it once was, and there’s also Income/Capital gains tax to factor in if you’re going to rent your home out.

The renovation game

Renovating isn’t for everyone – you might have to put up with builders arriving at 6.30am every weekday morning for months on end, and living in what will resemble a bomb site at times. But if you love the area and your family is settled in at work and schools nearby, you should at least consider renovating (or finding a more suitable property in the same area).

Renovating won’t necessarily be the cheaper option, though. You might still have emotional ties to your home and want to make it work, but you need to consider the financial implications that could cause more stress in the long run. Large-scale projects are prone to building problems and blown deadlines that send costs skyrocketing – especially at the moment when finding a tradesperson can be a huge challenge. 

Plus, not many of us have cash sloshing around in our bank accounts waiting to be spent! But if you’ve owned your home for a while, you’ll have equity in your home loan, which you could consider dipping into to pay for a renovation.

“You should only renovate if you intend to stay in the home for several more years – it’s a crazy expense if you’re likely to move in the next three years. If you’re thinking of moving, the smart play would be to push your plans forward and move up now.” – Debs Gregory | Ray White Central West

It’s a good time to sell

The Credit Contracts and Consumer Finance Act (CCCFA) restrictions are being loosened as of July 7th 2022, and it’s causing quite the buzz in the property market! 

The existing regulations – in place since December 2021 – were meant to protect borrowers from irresponsible and dodgy lending, but instead they’ve been blamed for being too restrictive, especially for first home buyers. The new regulations will relax some of the lending rules, such as banks having to go through borrowers’ spending habits with a fine-tooth comb, and means lenders may take into account that peoples’ spending habits will change once they take on a mortgage.

Why is this good news? Home buyers are on the move again! Because of the easing on the CCCFA restrictions, it’ll be easier for people to get the loans they need to secure a property, and the Government’s new First Home Loan Scheme means first home buyers who were previously shut out will be considering entering the market.

Talk to the experts

If you need expert guidance on buying or selling your home or property, Ray White Austar is the leading real estate agency in Central West Auckland. With our wide coverage of 5 offices plus a dynamic rental division, we’ll take care of all your property needs and make sure you’re making the right decision for your life right now. Get in touch with us today