Weigh the pros and cons
Many homeowners find themselves deciding between moving to a new home or renovating their existing home to accommodate their needs, says Adrian Goslett, regional director and chief executive of Re/ Max of Southern Africa.
And this decision is more often faced by owners still living in their starter homes – although there are purchasers who, knowing that property is a long-term investment, buy homes they know can be added on to when the need arises or their budgets allow.
“The decision will largely be determined by key factors such as whether the home has the necessary space for additional rooms. There is also the question of affordability and which choice makes the most sense based on the homeowner’s financial situation.”
Although both options have their pros and cons, Goslett says certain things need to be taken into account, such as the value of the property and estimated cost of the required renovations – and this includes the cost of the materials, labour and, if necessary, building inspector approval. It is also advisable to add 10% to the total renovation cost to cover any unexpected issues that may occur during the project.
Once an estimated figure has been established, owners will be able to compare the cost of the renovation versus properties they could purchase by adding that amount to their existing bond amount, he says.
“Depending on how long you have lived in the home, as well as the conditions of the market, there is a good chance you will have built up equity that could be used towards the purchase of a larger property.
“While determined by your needs and budget, it may be possible to find a home that meets your criteria and has some additional features such as an extra room, a double garage or is close to good schools.”
Of course, there is the alternative of not finding anything within the price range, which means it would be more feasible to undertake the renovation project, Goslett says.
When to fix up vs when to move
When renovation is the better option:
*You love the location of your home
as well as the neighbourhood.
*You can tolerate living in a construction site or moving out of the house for a while.
*You want to have complete creative control.
*You have a reliable building contractor.
When moving is the better option:
*You want to change your location if, for example, you are in search of better
schools or a shorter travelling distance to the office.
*The disruption of a renovation is too much to handle.
*Renovations may cause the property to be overpriced for your area. Source: Adrian Goslett, Re/Max