Today we want to tackle the big question facing many owners – “do we renovate, or do we relocate?” Maybe your family has grown, and you need a little more space? Or maybe the house is in dire need of an upgrade? If you have reached the stage where something must change, there are many points you must consider in order to make the right decision. Whichever you chose, it is going to greatly affect your finances, your stress levels, your relationship, and your family's future.
Renovating means you get to stay right where you are, but renovating an older home can open up a proverbial can of worms and end up costing you more than you budgeted. Relocating means dealing with the stress and cost of moving, but will also take time to find the right house in the right location, and at the right price. To help you make the right decision for you and your family, be sure to consider these 6 points.
Has your family outgrown the home? Are there more children on the way? Will kids fly the nest in the next 5 to 10 years? These are all important questions to help you make the right decision. Consider what you 'need', and consider what is less of a necessity, and more suited to your 'wishlist'.
Is your home old and run-down? By beginning a big project such as an extension or renovation, you might be taking on a challenge that you were not prepared for. Without carefully assessing the current state of your home, what starts out as a simple renovation can become a costly and stressful ordeal. Be sure to enlist the expertise of a professional to help you check the little things such as the wiring or foundations; this small investment in the beginning will certainly pay off down the track.
While a renovation might feel like it is solely about your family and their current home, it is important to consider the surrounding houses, and the future of the neighbourhood. Is your neighbourhood growing? Will your home suit the area in the future? Will you be also be able to find a suitable new home if you do decide to move, in a desirable neighbourhood, at an affordable price?
Whichever way you go, both are sure to induce some form of stress. Would moving be more of a headache than staying put, or is the thought of renovating an old home too much to bear? Children and schools are also important, and what would moving do to their schooling, and relationships? All important factors.
When it comes to real estate, 'overcapitalisation' is improving a property beyond its resale value. This could be when too much money is spent on a renovation, that cannot be made back come time to sell. Spending £50,000 on a renovation, only to increase the value of the property by £25,000 is an example of overcapitalising by £25,000. Something that certainly needs to be avoided.
However, if you plan to live in the house for the long term, overcapitalisation might not be such an issue.
Take your time, and don't rush into anything. If you do your research, and always ask professionals for help along the way, you will preventing any costly mistakes down the track, which are simply not worth the heachace they can cause.
For more renovation inspiration, check out our article on 9 ways to add value to your property.