RENOVATE OR BUY NEW?

This can be a tricky decision and there are advantages – and disadvantages – to both courses of action

IF YOUR property no longer suits your needs, should you take the time and spend the money to turn it into the home you require. Or should you sell and buy a new one?

The choice is tough and homeowners will need to weigh up several factors when deciding, says Adrian Goslett, regional director and chief executive of Re/ Max of Southern Africa. The first consideration should be a careful evaluation of what you can afford as both options carry expenses.

He says buying a new property will come with transfer fees, bond cancellation fees and various other costs.

When it comes to doing your home up, in addition to the building costs there is also the risk of unforeseen expenses should the renovations take longer than expected or unveil previously hidden problems.

Homeowners also need to consider which aspects of their home they are prepared to live with, and which not.

“Renovations can only go so far. That being said, relocating brings with it a long list of tiresome admin tasks such as updating your address with all your account holders and the post office, as well as moving all of your subscriptions and transferring other services such as DSTV.”

The trend, especially in luxury areas, is for homeowners to “stay put and upgrade” instead of buying a bigger and better home, says Seeff Property Group chairman Samuel Seeff. This is due to the high cost of moving, especially the transfer and transaction costs of luxury property.

Furthermore, many areas in Cape Town have benefited greatly from the upgrade trend such as Green Point, the CBD, Camps Bay and Clifton, where many a the older houses have made way for trendy new villas, apartments and penthouses – all of which contributed further to uplifting the area, he says.

High transfer duty and transaction costs have also meant many property owners are putting the money into their existing properties rather than selling to buy something new, say Seeff agents in Camps Bay, Pola and Nadine Jocum.

“Sellers who are developers tend to renovate to resell, but the majority of owners renovating is either increasing the size for bigger families or to optimise views and lifestyle, Pola says.

The Woodstock, Observatory and Salt River areas offer outstanding opportunities to invest in older properties and upgrade these to suit your lifestyle or family needs, say Seeff agents in Woodstock, Craig Algie and George Clelland.

With the high prices in the CBD and surrounds, these areas are now seen as an excellent alternative with good growth achieved over the past few years.

Homeowners trying to decide between the two options should ask themselves the following questions, advises Jawitz Properties:

◆ Can the property be renovated – does it lend itself to alteration?

◆ After renovation, will the home give you what you want at a price equal to or better than you would have paid for a new one?

◆ Take your area into consideration – will the renovation be worth your while? That is, if you sell, will you make a profit on the renovation?

◆ Are you prepared to put up with the inconvenience and trauma a renovation usually entails?

◆ If you don’t renovate, can you find a property that offers what you want, where you want, for the amount of money you have available?

FIX UPPER Many property owners are opting to stay in their homes and renovate instead of buying a new property.