When your family starts growing or you're preparing to welcome a new baby, a big question arises: "Should we upgrade our home to suit our expanding family, or should we invest in Bali property?"


This is a tough decision many parents face. On one hand, upgrading your home addresses immediate needs for space and comfort. On the other hand, investing can help secure your financial future. Both options have their pros and cons, and often, it's not possible to do both due to financial constraints.


Here, we'll explore the trade-offs to help you make the best decision for your family.

Why Can't You Do Both: Upgrade and Invest?

For many families, choosing between upgrading their home and investing in property is a matter of financial capacity. Both involve significant expenses and often require taking on larger mortgages.


When you have a new baby or young children, household income might decrease temporarily due to parental leave. This can limit how much debt you can take on. Banks may also restrict how much they're willing to lend, forcing you to prioritize.

The Pros and Cons of Upgrading Your Home

Benefits of Upgrading

  • More Space: Growing families need more bedrooms and functional living spaces.

  • Better School Zones: Larger homes in prime areas may give your children access to preferred schools.

  • Emotional Fulfillment: Upgrading often fulfills a dream of moving into a better home, offering a sense of accomplishment.


Drawbacks of Upgrading

  • Delayed Investment Goals: Focusing on your home could mean putting off wealth-building opportunities.

  • Retirement Risk: Without assets beyond your home, you might retire with limited financial flexibility. This could lead to relying solely on the pension or needing to sell your home later in life.


Ultimately, upgrading provides comfort today but could mean less financial security tomorrow.

Scenarios: Choosing Between Upgrading and Investing

Scenario 1: Upgrade Through Renovation

Sometimes, renovating can be a middle-ground solution. For example, a couple couldn't afford to invest in property after running the numbers. Instead, they renovated their home by updating the kitchen, bathroom, and adding a bedroom. This strategy increased the home's value and positioned them to invest later.

Scenario 2: Prioritize the Family's Immediate Needs

Another couple decided to upgrade their home rather than purchase a fifth rental property. They needed more space for their teenagers, including building a sleepout for their eldest daughter. Their decision was based on their family's immediate needs, as they already had a solid retirement plan through their existing investments.

Scenario 3: Invest First, Upgrade Later

For families with young children, it may be easier to delay upgrading. Younger kids are less concerned about space. Investing first can build wealth faster, leaving you in a better position to upgrade your home later. For example, families with toddlers might focus on investment properties now and revisit upgrading when their children are older.

Key Considerations: What's the Right Decision for Your Family?

Choosing between upgrading your home and investing depends on your specific circumstances. Consider the following:


  1. Financial Position: Assess your budget and borrowing capacity.

  2. Children's Ages: Younger kids might not need more space right away, while teenagers often do.

  3. Long-term Goals: Balance immediate comfort with future financial security.


Ultimately, the decision is about what aligns with your family's needs and financial aspirations. Upgrading now offers comfort, while investing first builds long-term wealth. Whatever choice you make, ensure it supports both your family's current needs and future plans.