The family’s growing, perhaps elderly parents need accommodating, perhaps you’re just tired of waiting in line for the bathroom in the morning.
Whatever the reason, there comes a time when home owners must wrestle with the question - do you extend or do you sell and buy a larger home?
If you like the location you’re in and you have the room and means to extend, that may be the way to go.
Generally speaking it’s more economical to renovate to gain more space rather than sell and then buy on the same market. However, if there's a home on the market that meets all your wants and needs and it's do-able financially - jump to it.
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But it’s not all always about dollars and cents.
James Whitley recently extended his modest Auckland home - spending more than $150,000 on an open plan kitchen and outside dining area. The result is stunning. But did he, like many home renovators, spend too much on the renovation?
“Oh probably but we’re not looking to sell,” he says. “We’re happy here and have no plans to move. We didn’t do this to make money - we get the value every day; it’s really changed our lifestyle for the better.”
A general rule of thumb is homeowners shouldn't spend more than 25 per cent of the value of their house on renovations. If going the reno route, keep in mind the shortage of builders especially in Auckland.
“Builders expect to be busy and the shortage of skilled labour will continue to be an issue across the industry in 2018,” says Grant Florence CE0 of New Zealand Certified Builders.
Whatever plans you have, Florence says it’s critical to ask the right questions at the outset and get the relevant paperwork sorted: “It’s important to ask a builder about their trade qualifications, not just to know that they are a Licensed Building Practitioner (LBP).”
If you choose to sell, being organised is key. Ideally you’ll sell quickly, have cash in hand and have negotiated a long settlement date to allow time to find that bigger home that suits your needs.
Alternatively, buy first and make your purchase conditional on the sale of your existing property - a fairly standard clause in property sales agreements in New Zealand.
Yes, moving house will save your home turning into a building site but the move and other fees could cost thousands on top of the property costs.
Each situation is different - just remember to do your research and keep a calculator handy.
- Set a deadline - some choose to spread the cost over several years.
- To accurately estimate building costs for your planned extension, employ a quantity surveyor.
- Allow at least 10-20 per cent for over-runs and budget blow-outs.
- Plan once, plan right – once under way, a change of plan usually means delays and increased costs.
- Check out the competition - see what else is out there. Go to open homes and compare your property with others in your area.
- Dissociate yourself from your house - if personal belongings clutter the house,buyers will find it hard to imagine living there.
- Choose your real estate agent carefully. A good agent can go beyond what the market is prepared to pay and negotiate for what it is able to pay.
