Renovate?

jezzarose · Jun 04, 2020 12:50 pm

Currently own a three bedroom home, one living area, 360m2 block (built in 2018/19). We have been considering building a second story, which would turn the house into a four bedroom home, with a small study and a second living area. Have been quoted 170k. House as it currently stands is valued at 430k.

If we go ahead with this are we risking overcapitalising? Should we just look at building a whole new house?

Obviously now is the time to make the decision with the current grant!

brokenstick · Jun 04, 2020 6:03 pm

170k seems extremely cheap for adding on a second story.

Whether you are overcapitalizing generally depends on the area you are in and property values around you

Juan · Jun 04, 2020 7:26 pm

Overcapitalising is in the eye of the beholder. It depends on how long you plan on living in the property. If it is long term who knows what house pricing will look like in the next 10 years or so.

Another way to look at it is if you put in $170k onto your $430k and get 10 greats years of liveability and the house is only worth $550k at the end of the 10 year period. Then is the capital costing component vs the change in your liveability standard that much of a gap?

One thing I would say if you have the means to do so - do it now.

SaveH2O · Jun 04, 2020 7:35 pm

Juan

If it is long term who knows what house pricing will look like in the next 10 years or so.

Who knows what anything will look like 10 years from now except bad.

jezzarose, your most important consideration on which to base decisions is long term job security.

MiddleMark · Jun 04, 2020 9:05 pm

It is high time to act, the only thing all experts keep saying in terms of starting constructions or renos