Nov 17, 2011 1:17 pm
We are new to the building game and are still in very early stages. Our most recent discussions have been around setting the budget and over-capitalising our property. Do you build the best house you can afford to because after all this is a house for us OR to you keep in mind at all times the resale value and by going too overboard will you never get your money back if you have to sell.
So if you could please give us your expert opinions and/or vote it would be a BIG help.
Re: Build your dream home or dont over-capitalise3
Nov 17, 2011 3:09 pm
We went overboard as we plan to make this our forever house. My partners parents and there parents are still in there origional homes they built and ive moved my whole life which im sick of so hopefully we stay.
http://lindeman28.blogspot.com - Our building blog
Re: Build your dream home or dont over-capitalise4
Nov 17, 2011 4:15 pm
I would try to strike a balance - more for being able to commit financially then overcaptalise.
If you believe that it is long term then you can never overcaptilise.
Thats my 2 cents anyway
Building PD Heathmont 40
Deposit paid 19/08/2011
Contract signing 3/10/2011
Site Start 10/11/2011
Re: Build your dream home or dont over-capitalise6
Nov 17, 2011 4:51 pm
I would rather have the money to have decent holidays and have a reasonable lifestyle than overspend on a house and be struggling with debt.
Building a dream house can quickly become a nightmare if you lose your job.
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Build your dream home or dont over-capitalise7
Nov 17, 2011 5:00 pm
I don't think a lender cares if you live in a castle or a hutt when it comes to not making repayments.
The only thing to be said is if mortgage is stretched to two incomes and cannot be serviced by the primary. This is poor planning.
Re: Build your dream home or dont over-capitalise8
Nov 17, 2011 8:22 pm
One trap you can get into is if you treat it like an investment that you may need to sell later on and build it to suit there is every chance thats just what you'll end up doing because once decisions are made and the house is built it's very hard to make changes. I'ts important to build it for you to enjoy because the cost of selling a home to buy another one is very high - in fact if you are going from one 600k house to another for example you'll be looking at close to 50k. So it may be worth spending that extra if it means you will want to stay. So many people decide not make upgrades they want and then after they move in a year or so down the track they wonder why they didn't spend the money as it wasn't really THAT much.
Having said all that it pays to look at the market in your immediate area and see what kind of money the house would be worth finished and if it's costing you more than that to build. When you sell it like I sold mine after 3 years you will most likely never know if money was well spent or saved and it's impossible to know exactly what the market may or may not have paid.
Re: Build your dream home or dont over-capitalise9
Nov 17, 2011 8:30 pm
My wife and I are in the early stages and have decided that we will both get the house features that we want. It will cost a little extra but we are planning to be in the house at least until our kids finish High School, so far we only have a 2yr old so obviously want to be there a while.
It should always be within budget, we have a two budget levels for our build, our preferred spend and our top limit which would still be affordable to us but stand up if interest rates went through the roof or I lost my job and didn't get a new one for 12 months
Re: Build your dream home or dont over-capitalise10
Nov 17, 2011 8:42 pm
Like most things in life,it is a balance - yes, you have to build what you can afford and no good over stretching yourself and then haveing trouble making ends meet - but on the other hand if you really want something and can afford it, go ahead, even if cost will not be fully re-couped if house sold.
I dont necceasarily beleive in "build the best you can afford" either - totally depends on your circumstances.
We built an empty nester house - could easily of afforded to build a bigger "better" one - but we built what suited us - and are happy to be able to save for overseas holiday now and also happy in our medium size house.
Again - all about right balance.
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