Although many homeowners have been downsizing during the past year, there are those who have found that the family home is no longer big enough. Maybe you’ve had another child, your home office area’s been reassigned as a bedroom or the spare room is so full you need another spare room to house the overflow. Whatever the case, you’ve come to the point at which you need to think about whether to move or build.
It’s not an easy decision to make.
Ultimately, you’re going to have to make some calculations. If, for example, you take out a loan to build, what will that ultimately cost you, in terms of repayment? What interest will you have to pay? Will extending your patio or remodelling your kitchen solve your space problems? And how will the building costs affect your budget?
According to Ya’el Geffen, executive director of Lew Geffen Sotheby’s International Realty, you need to consider some unchangeable aspects about your home that you like or don’t like. Are you close to good schools, shops and other amenities? What’s your neighbourhood like? Are you frustrated by traffic? Is there a lot of crime in your area? How long does it take you to get to and from work and what are your fuel costs like?
If these factors aren’t ideal, investing in an upgrade will be a waste of time because you may not choose to stay in your house long enough to justify the outlay — even if you’ll get that great home office or much-needed second bathroom. You need to consider if you’d be able to recoup your investment in an upgrade when the time comes for you to sell.
“Extensive, expensive alterations to a home, which should for all intents and purposes increase the value of your home, could cause you to lose money due to over-capitalisation,” Geffen warns.
On the other hand, if you love your home and plan to stay for the next 10 or 20 years, an upgrade might be the way to go, disruptions notwithstanding.
Ultimately, you need to weigh up whether unchangeable factors counting against your home exceed those that count in favour of it. Also, find out what price you’d get for your current home if you upgraded it, based on average house prices in the area. Get estimates from contractors — that will also help you to make an informed decision.
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