So many uncertainties are part of a large-scale remodeling project that it’s no wonder most homeowners opt to sell up rather than endure the disruption of building works in their lives.
Money is also a key consideration because more renovations run over budget than don’t. Life gets tricky if you run out of cash or your lender won’t extend additional credit.
You have more control of your finances when you search for a new home. You can set your spending limit safely so long as you remain realistic about the likely price your current property will achieve.
The disruption that even modest extensions cause to the whole family should never be underestimated. Then there is the hassle of selecting an architect, builder, designs, materials and then coping with the chaos of construction.
Remodelling is also not always guaranteed for you to make your money back on the investment when the time does finally arrive to sell. Remodels date quickly, and the best way to earn your money back is to put the property on the market immediately after the work is completed.
If you’re currently weighing up your options, here are some key points to support why you should move up.
- A renovation can increase the value of your existing property but it may not yield the long-term financial benefits of moving up to a more expensive home. Consider your location and land size.
- Do you really have the money? Few renovations are delivered on budget. There’s scope-creep as you change your mind and finesse what you want. The alternative is to live in something half finished until you save the additional cash.
- There are always unforeseen problems with significant renovations, and these can cost you big time. It is recommended you put aside an additional 20% of the cost to cover budget overruns.
- It’s easy to over-capitalise, especially if you change the floor plan. Always be careful to ensure that you’re not spending more money on the renovation than the final house will actually be worth. Ask yourself, will your renovation bring your property up to the standard of other homes in your street? Or make you the best home in the street? The latter is a sure sign of overcapitalising.
- Chaos will reign for months. The disruption and stress of a renovation on the whole family can never be dismissed. Consider when teenagers may be taking tests and other major life events that need to be managed around.