How do you know if you are adding real value to your home and not overcapitalising?
Here’s a quick example:
If your home is worth $850,000 today and you plan to spend $250,000 on an extension, then you need to be confident your new and improved home will be worth at least $1,100,000. If comparable properties in the area are currently selling for around $1,000,000 or under, then you’re at risk of overcapitalising.
If you are renovating because you plan to stay in the house over the long term and the extension is going to meet the future needs of your family, then ‘knowingly overcapitalising’ might be the right decision for you.
Here are some things to consider when you are planning to renovate:
Valuation: Do your research. Determine the value of your home as it is today and what is it worth before you do anything to it? You can find this out by looking at what homes similar to yours have sold for recently.
Fixed price contract: Factoring all the costs in from the start will help ensure there are no financial surprises. A fixed price contract gives you peace of mind.
Needs v wants: Be clear about what you’re doing and why you’re doing it. It’s easy to get carried away if you don’t have a clear plan. Focus on what will improve your lifestyle as well as the value of your home.
Stretch your dollar: When it comes to the design and specification of your renovation, look for features and products that can have a big impact but with a relatively small financial outlay.
Wide appeal: Contemporary kitchens and bathrooms, and light-filled open-plan living spaces are always a winner with the majority of people. Choose changes and additions that will have a wide appeal.
The right team: Look for a builder with a proven track record, quality workmanship and cost-effective design skills. Working with the experts means your project will be completed to a high standard, your layout will work and you’ll have spent money where it matters most. Spinryde have been in this business for over 30 years.
Contact us now to discuss your renovation requirements.