15 Jun 2011
If you’re starting to outgrow your current home then you might be thinking that it’s time to either find somewhere bigger or extend the home you already have.
It can be hard trying to decide between the two options, but it can help if you consider the costs and the logistics of each.
If you plan on moving then you will need to look for a new property, organise finances for the purchase of a new home, and possibly sell the home you have, and then pack up and move.
If you decide to improve your current home, you will need to get building quotes and advice on the additions you plan to make and find finances for the approved building works. You may also need to live somewhere else temporarily while building works are taking place.
Whichever option you choose will likely end up costing you more money, so you’ll need to figure out which option is cheaper and which will be more profitable in the long term.
If you plan to add to your current home or even rebuild it altogether, then you need to be careful not to overcapitalise. Will a bigger home on your block sell for much more than it’s currently worth? Extensions or new homes are expensive, so you’ll need to ask yourself whether or not your home’s value will go up by the amount you intend to spend on it.
Research what other new and renovated homes are selling for in your area and have a chat to local real estate agents. If they don’t think your property will fetch much more with an extension or new home on the block, then you’ll have to ask yourself whether or not it is worth making major improvements.
So what about moving? With moving you will need to take a look at the current market conditions and figure out whether or not you will be able to afford a new place. Do you need to sell your current place to buy a new place or could you just rent it out? These are important questions to ask yourself, as you will need to figure out how you are going to be able finance a new property.
If you add up the costs and benefits of moving vs. improving you will probably start to get a pretty clear picture of which option is better for you. It helps to talk to builders and real estate agents though, as they can offer you advice based on your individual situation.