To renovate or to upgrade – which is best?
Most of us will live in two or three family homes during our lives. You might find that over this time needs change as does your capacity to meet those needs. So when the time comes for a change, is buying a new home a good idea, or is spending money on the existing home a better option?
By renovating you save the hassle and stress of moving to another home and location, plus the considerable expense involved. Alternatively, buying a new home could require thousands of dollars just to cover agents’ commission, duties, legal fees and removal expenses.
Do your research on renovations
Generally, renovations that increase the size of the home will add to its value, while cosmetic features may not. Features that can add real value include:
- Additional rooms – bedrooms, office or media room
- Adding a secure garage
- Re-modelling kitchens and bathrooms
- Landscaping to reduce maintenance.
At the other extreme, swimming pools can be poor investments. They take time and money to maintain, particularly with the rising cost of water. Also, a prospective purchaser may not want a pool, so you could limit your market. Having said that, it depends on where the home is located. Backyard pools can be very popular in the tropics.
You should also consider your location. Home values tend to be based upon others in the district and even if you have extra features it may be more difficult to sell if the asking price is higher than others around you. Don’t make the mistake of making your property the best house in the worst street.
As always, doing good research is essential to making robust financial decisions.