Maybe your family is about to get bigger or perhaps you are looking for a separate home cum office space. You have two choices here. Either you upsize by buying a new home altogether or you renovate your existing home and try extending it as much as possible.
When faced with such choice, which way should you go? Let me share a few thoughts. May be they will help you with decision-making.
Physical property valuation
Seek your property’s valuation. Remember not to take the short cut route of online valuation. In this age when internet is fast catching up, many find themselves at the receiving end of anomalous property valuations online.
Prime reason is that such valuations regard the average rather than median household prices, thus jeopardising the relevance of a small sample set.
Moreover, online valuations do not take into account the unique characteristics of a home. To cut the story short, seek proper assessors or valuers who can provide an exact current estimate of your home through physical evaluation.
Equity status of mortgage
Check the present equity status of your mortgage and figure out if you are eligible for a refinance. It will make the decision between renovating or selling easier for you. May be you have a pre-approved refinance option which can help you borrow against your home equity at a pretty reasonable interest rate.
Costs involved in selling a home
If you have made up your mind to sell the property, remember there is a wide repertoire of costs involved in the process. There is the vendor’s fee, property lawyer’s fee, stamp duty and costs of moving, to name but a few.
Comparable Sales Figure
Prefigure the comparable sales figure of your area to find out how much are homes worth in a short radius from your home.
In fact, this data can also come handy if you are renovating your home. After all, it gives you a sneak peek into the maximum amount you should spend out for renovation, keeping the ROI of your home intact.
Costs of renovation
If home renovation is your choice, you will be well served by a ballpark estimate of the builder’s fee, expenses on raw materials, council approval fee (let us say you have to modify a load bearing wall), among other costs.
Renovators often make the error of overcapitalising and feel the pinch only when they are burnt during sale of their homes on a later day.
Opportunity Cost due to renting
It is important to remember that there may be a rental cost involved for the time duration your home is under renovation. After all, depending on the extent of the renovation it is only natural to assume you cannot (or don’t want to) reside in your home till the major renovation part is complete.
Potential Gains
When done right, a home extension can not only give you the space you need, it can also substantially increase the value of your home, clearly outweighing the cost of the renovation itself.
If you’re located in Sydney, why not give me a call and I will be happy to speak to you and help you make the right choice.
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