Most home owners will reach a point where their house no longer suits their needs, or they simply want something different. This raises the question – is it better to improve, or move? To help people facing this dilemma we have considered the various options.
If your house falls well below the typical standards of the neighbourhood, improving it is almost guaranteed to recoup some money. A nicer driveway, kitchen or bathroom would be a cost effective way to bring your property’s value closer in line with an area’s expected price range.
However, if you own one of the most valuable houses in your area and choose to improve it further, you risk creating a ‘white elephant’ property, which you will be unable to sell at a price that reflects your investment. House hunters seeking a high value property are typically attracted to homes in areas with houses of a similar value.
It is also worth considering whether your area has convenient transport links, is near desirable schools or generally looks attractive. If none of these apply, you would probably be unable to make your house significantly more valuable by improving it.
Utilising all your space?
As the nature of your household changes over time, so should the way you utilise your space. If children head to university, former bedrooms may serve you better split into two separate rooms. Or as babies become toddlers, old offices and utility spaces may be more useful opened up to make a playroom.
These kinds of changes could be more cost effective than buying a new home, or desirable if you are happy with where you live. However, they are unlikely to significantly improve the value of your property. If you unexpectedly needed to leave your home, for example due to a new job, then any money invested in this capacity would most likely be lost.
If your home is simply too small but you have the land, you could seek planning permission for an extension. Before any work is carried out, however, you should seek advice from an estate agent as to how this could affect the value of your home and consider whether the work is cost effective.
When you buy a house, you have much clearer idea of the costs involved than when you improve one; projects can run over budget and take longer to complete than first anticipated. In return for this risk, the potential financial rewards are much greater and you have a chance to enhance the space in which you live, tailoring it around your needs.
One element of risk is that your tastes may not match those of the typical house buyer. Even a bigger house does not necessarily mean a more valuable one as you could spoil its aesthetic appeal.
A question worth considering is how much of a profit on your investments would you want in order make it worth your time and effort?
Given these factors, you could be forgiven for seeing moving house as the easy option. However, you could underestimate how much living in a different area could affect your daily life. Finding someone to buy your property and moving all of your possessions is also, of course, not stress free.
The main downside of purchasing a new property is that, however nice the house you buy is, you will not be any better off financially as a result. When compared to home improvement, moving house is purely a case of spending money rather than making it.
Whether you should move or improve comes down to a very individual impulse – are the things you dislike about your home resolvable, or are they deeper than that? Do you have the time and spare income to dedicate to an all-consuming, high-pressure project?
Homes are very personal buildings, meaning more to most people than mere financial investments. If you feel it is time for a change, your gut feeling is often what makes the most difference. You may even decide to go for the more expensive of the two options because your life and happiness are more important to you than your savings.