"Our children have grown up playing in that backyard. I can’t even bear to think of leaving it."

Going from a family of four to a family of five has made quite the unexpected difference in our lives.

Don’t get me wrong, we were prepared for a bit of a shift, but now that my children are older and need more space and independence, I’m finding our quaint three bedroom home not so “adorable” anymore. Plus, with children now staying and living at home for even longer, we can’t just plan and cater for the present, we need to start thinking about the future as well.

But now we have the conundrum – do we renovate or relocate?

Maybe I should go back to when we first purchased the house. As I said, it was adorable and admittedly, we only had (and planned on having) two children at the time.

Fast forward 10 years and we have another child (whoops) and the sweet little cottage I always imagined our family growing up together in, now feels cramped and quite frankly, bloated.

Back then, the fact that we were scared to even enquire about a home loan, now makes me laugh. We both had good, stable jobs and knew we could easily cover the mortgage payments, but still, a fear lingered. At the time, the words ‘principal interest’ and ‘redraw facility’ baffled us and we were too scared of looking stupid to even ask the questions. Luckily however, we plucked up the courage and our bank helped us to understand all the terms in a straightforward and simple manner.

So then, back to our problem – should we renovate or move on to a larger home than the one we already have?

The decision isn’t easy – our little spot on the map has defined us as a family for so long now, we can’t imagine living anywhere else. We’ve made friends in this street, and our children have grown up playing in the backyard, have fallen out of the mango tree and broken arms and cuts toes and done countless cartwheels across the grass. I can’t even bear to think of leaving it.

On one hand, if we renovate and extend, we’ll get to keep our home and give not just the children, but ourselves, more space. I would adore a study, a nook even, that is just mine. To read, to write and to lose myself in.

On the other hand, as soon as you say ‘renovate’ suddenly everyone (and I mean everyone), has an opinion. They want more bathrooms, heated towel racks, a pool (that’s not happening). Like I said – it’s not an easy decision. We’ll have to weigh up the cost of renos with the emotional and financial cost of moving. I know a few families are in the same position as me, so I had a chat with Amy Moore, a mobile lender from Suncorp Bank who travels to people’s homes and offices to help out with home loans.

5 tips if you’re considering renovating vs relocating.

• Get a valuation. Finding out how much your place is currently worth is a great place to start, and might help you make a quicker decision about whether it’s worth spending money on renovations, or if you’re better off moving.

• Do your research. Once you know how much your place is worth, you need to know the value of other homes in your area, in terms of weekly rent and sales prices. Have a look at real estate websites for property prices over time to get an idea. This can help stop you from spending too much if you do decide to stay put and renovate. Which leads to our next tip…

• Don’t over-capitalise. Make sure you’re renovating for profit, not over capitalising. Renovations aren’t just about making your home easier to live in. You need to make sure you’re adding value so that when you do decide to sell in the future, you make back the money you spent (and then some – hopefully). Over capitalising means spending money to improve a home beyond its actual resale value. For example, if you spend $50,000 only to find the value of the home has only increased by $10,000 or $20,000, you’ve over capitalised, and effectively lost money.

• Figure out your budget. Whether you decide to move or stay, you’ll probably be up for some expenses. It’s worth trying some budget tools and home loan calculators. Also, consider making an excel spreadsheet to weigh up the costs of renovating vs staying put. It’s more objective than writing a pros and cons list!

• Speak to your bank. Whether you’re buying a new home or want to add to your existing loan to do some renovations, talk to your bank as soon as possible. If you decide to move, having pre-approval will make you more attractive to potential sellers and real estate agents. If you decide to renovate, you’ll know how much you could borrow. Speaking to your bank will give you a head start, whatever decision you make.

The big decision of whether to renovate or move can really be quite simple as long as you are prepared and have done a little research. My personal tip? That study could make for a great nursery, just in case any new additions come along (just sayin’).

Have you had to make this decision? What did you choose?