Improve Your Home Today
Even though house prices are rising slowly at the moment, it is worth investing in your home by maintaining and improving it. There are several good reasons for homeowners to tackle renovation projects now, rather than putting them off until later.
Building is Cheap
Business is currently very slow in the building industry, so the chances are good that contractors will now not only call you back, but also offer you a significant discount on what you would have paid a couple of years ago. In addition, the prices of many building materials have gone down, so DIY projects should also be cheaper to complete.
Interest Rates are Low
If you need to access some of the equity in your home, or borrow some money to finance a renovation project, now would be a good time to do so because interest rates are so low. And if you upgrade your home instead of moving to a new one, you get to keep your existing bond. Apart from the fact that it is often cheaper to renovate than to move (no transfer duties, bond registration, legal fees), staying in your existing home means that you also do not have to go through the nerve wracking process of applying for a new home loan (or go all the way back to the 20-year repayment starting line).
Undertake Smart Projects
As for those worried that they will not recoup the costs of any renovations if they then decide to sell their home, they should be looking at “smart” projects that will add value, even in the current market. At the very least, you should ensure that potential buyers do not bypass your property in favour of competing homes that have been modernised. Look at the neighbourhood and analyse what could lift the overall value of your investment.
For example, there is a big difference between remodelling a ten-year-old kitchen or bathroom now just because you do not like the style anymore (which would be a waste of money if your plan is to then sell the property), and replacing a 40-year-old installation that would really put potential buyers off. Other smart projects to consider now are improvements that will cut energy costs (such as roof insulation, solar power systems and heat pumps) and conserve water.
Plan for the Future
All renovations are best undertaken when you are planning to stay in your home for at least another five years. If you are going to add on an extra living room or create a great new entertainment space outdoors, the idea should not be to do so for the next owners of your home, but so that you can enjoy the home you already love even more.
Story by Jan Davel (First Published in REIM http://www.realestateinvestormag.co.za/)
