As our families grow, our homes don’t grow with us. We may have more children than originally, and be short of bedrooms. We may need an extra bathroom or space for an elderly parent. The big question is whether it’s better to renovate an existing property or to buy a new one. No one wants to get this wrong, because our homes are our biggest purchase and greatest asset. Here are some things to think about right now.
The Pros of Selling
Imagine buying a new home that was exactly as you needed it. All you had to do was move in and enjoy it! The major plus here is that there are no renovations or building work to be done.
If the original home has grown in value sufficiently, there is a real chance of buying a better one next time. In terms of insurance, a new home is less of a liability than a renovated one.
Whilst many homes can be renovated for purpose, some people want to move to a new location. This could be because of difficult neighbors, a troubled area, or being too far from school or work. There is also the opportunity to be nearer to friends or family.
Someone may lament the fact that they have to clean the home and perform basic repairs before selling. If there is a huge amount of rubbish, this will need to be hauled away too. According to the professionals of www.socalhomebuyers.com, there are companies that will buy a home as it is, without these things needing to be done. It is possible to obtain a quick sale for cash that will take just hours or days to happen. The added benefit here is that there are no real estate fees, and sellers can choose the escrow that suits them.
The Cons of Selling
When a person moves house, it involves a lot of expense. This includes stamp duty, and legal and realtor fees.
Someone may struggle to find what they want in the right location or price bracket. They may also find it hard to obtain a buyer who is prepared to pay the sale price.
It can be a stressful process and take time. We could be talking four to six months on average. It can be time-consuming and demoralizing having to keep the viewings going, too. It could fall out of escrow during the sale process as well.
The Pros of Renovation
If someone loves their home and the location, they may be able to make it bigger and better. This option works best for those with no plans to move for the foreseeable future. The changes (such as adding bedrooms) may add value to the house, and make it fit for purpose.
It’s highly likely that it will be cheaper to do this than to move elsewhere.
The Cons of Renovation
Without planning permission, nothing can be done. There are often hidden costs, too. Builders may not know all the changes that need to be made until they take up floors and check wiring and plumbing. There may be damage through neglect, and aging systems needing to be replaced. There may also be a risk that the new work will cause structural damage, such as taking down a supporting wall.
Over-capitalisation can be a real risk for those who decide to upgrade their homes. They may spend $50,000 but only increase the value of the home by $25,000.
Building work frequently overruns. Imagine living without a kitchen or bathroom. If there are children at home, things can become even more stressful.
People are recommended to take out a construction insurance policy. Imagine moving out while the work is being done, and having to pay rent elsewhere. Precious savings can be diminished, and even more so if things overrun. Some people choose to move in with friends or family to save money, but this can cause a real strain on relationships, particularly if things take longer than originally planned.
Having looked at all the options, people need to decide what they want. Can they afford to modernize their existing home or do they want a new one that is tailor-made for them? Some people enjoy a project, so renovating their homes may be appealing. They may alternatively buy a new home that is cheap because it needs renovating.
People need to cover the budget angle, avoiding over-capitalization, or running out of funds. It’s important to have a contingency amount reserved. If the right decision is made, the occupants will enjoy their home for years, be it in an updated home or a new purchase.