No one wants to overcapitalise on a build. Building is expensive, yes, we know it is! Especially when those dollars paying for the renovation are hard earnt and have taken years to save.
It can be really hard to know what direction to go in, do you hire an architect or draftsperson or perhaps go direct to a builder who can work out the plans? Can you work within the existing shell of the building or do you need to extend – does this mean you need a planning permit or development approval or can you just remodel?
And after you have decided all of these items you then need to work our if you are OVERCAPITALISING or not!
To work out if you are overcapitalising you will need to have a bit of a grasp on what you will do with your home in order to make some assumptions and then calculate the cost of relocating and the additional amenity you might be able to afford, vs what you might be able to achieve by renovating or extending your home.
Here are some key considerations for staying in your existing home, renovating, extending or building new v’s buying a new home.
Stay and renovate!
Sell and relocate!
What will you be able to achieve with your renovation?
Do you have enough land?
Do you love your area?
Does your home have sentimental value?
How long will it take you to go through the process?
What will the cost be?
Where will you live while renovating or building?
Who will you engage to do the project?
Does this excite you? Do you want to spend time creating the home perfect for you?
Can you afford to buy in the area you love again?
Will you be able to buy a home that suits what you are looking for in the area you want?
Are there different areas that might be better for you?
How long will it take to find what you are looking for?
What additional amenity are you trying to achieve by moving?
What are the design and professional fees?
What will the build cost?
Will you have relocation costs?
What will the end value of the home be? Have you invested more than it will be worth?
What are your selling costs?
What are your relocation costs?
What are you buying costs?
We have prepared a much more detailed Love it or Leave it calculator which provides a more in-depth look at the considerations, helps you calculate if you will be overcapitalising and allows you to work out the cost of staying out verses finding your new dream home!