Nows a good time to renovate maybe
|In order to sell a home these days, owners need the property
to outshine the competition and also need to be very patient as well as
highly negotiable on price.
Consequently, says Dr Piet Botha, chairman of the Nationlink estate agency group, it isnt surprising that many are shelving their plans to move and deciding instead to extend or improve their existing homes.
If youre settled close enough to work, your children are happy in their school and you like your neighbourhood, theres a big attraction in staying put and just altering your current home to give you the extra space you need or the new finishes you want, especially when you also consider the upheaval and additional costs associated with moving.
But, he says, current market conditions should make you think twice about renovations and prompt you to seek expert advice from an experienced estate agent before you embark on any major projects.
Clearly, with home prices now rising much more slowly than during the boom years and even stagnating in some areas, now is not the time for most people who bought in the past two years to be thinking about major additions and alterations. They will most likely not have a lot of equity in their homes and the value will just not rise fast enough in the near future to cover a big outlay on top of what they already owe on their bonds.
It is thus quite likely that their homes would end up being overcapitalised for quite some time that is, being worth less on the open market than the amount that has been spent on them and this is only a risk worth taking if you are sure you are going to stay put for the next five to 10 years.
On the other hand, he says, if you have already owned your home for at least five years and benefited from the big increases in values from 2003 to 2006, you may well be in a good position to make extensive improvements.
What it comes down to in this case is weighing the costs of moving against the estimated renovation costs, and also taking a clear-eyed view of the non-financial benefits of moving or staying, such as the quality of schools in different areas or the convenience of a shorter commute.
And finally, whatever the state of the market, you do need to take expert advice on whether your planned alterations will actually add value to your home. You may fancy a gourmet kitchen, for example, but if that is out of character with most homes in your area, it may be a waste of money no matter when you put it in.
Article From: www.nationlinkproperty.com