Different May Be Better Than Bigger
Homeowners planning expensive additions or alterations should be aware that they will not necessarily recover the total cost of these improvements when the time comes to sell the property.
The first factor to take into account is how long the owners are likely to remain in the house. If they plan to stay for many years and the alterations would add considerably to the comfort of the family they can most likely proceed with an easy mind.
By the time they decide to sell, property prices in the area are quite likely to have risen sufficiently to cover the additional expenditure.
But, note the experts at Homenet, South Africa's biggest estate agency group, if there is a possibility that the family will be moving fairly soon, there's a good chance that they will overcapitalise the property if they make any major changes.
In other words, their total expenditure including the purchase price and the cost of any additions or alterations will exceed the amount they can realise on resale.
Secondly, says Homenet, owners need to consider the nature of the neighbourhood in which the house is situated. Creating a large four-bedroom house in an area of smaller homes populated largely by young first-time buyers is much more risky than renovating or adding on to a smaller home in an area where most buyers have families and want the extra space.
A home that is out of character with its area is generally harder to sell and in most cases will not command a price premium, no matter what the owner has spent on improvements, because it is not what the majority of buyers in that area expect or want.
And finally, homeowners will often find that a relatively small construction job such as the addition of a bedroom or bathroom does not attract the most competitive quotes from builders.
In fact, says Homenet, most homeowners who are considering additions or alterations because their family needs more living space would be better advised to put the money they would have spent towards the purchase of a bigger home.
Article by: Homenet - www.homenet.co.za