Ok, so you have decided not to build your dream home and stay in your current home and expand the living space. First off, as I explained last week, you will need a plan to figure out and to decide how large an expansion you would like to add, based again, on a budget; and to do your best to stay within it to the best of your “emotional ability.” For when one begins, and as we go along, one starts adding to the original plan and there goes our budget.
Yes, we do get emotionally involved in our project and as we see our vision unfold; we get excited and figure, oh, it’s just money and we will always get it back when we sell. But what if you have to sell sooner than later for a number of reasons, divorce, a passing of a spouse, financial, etc., and all that extra money spent on your “wish list” becomes a greater benefit to the buyer, than to your family?
That is why you need to be very careful in your budgeting and planning; unless you have extra rainy day money squirreled away and decide that your home is where you really want to invest it. Another consideration or idea is, based on your budget and how large of an increase in square footage you are adding; get some comparable sales in your current area from your local realtor (or me) to see what similar homes of the size or condition are current selling for so you will have a realistic idea as to the current “after construction” value of your home.
You also want to consider your timeline of staying in your home after your expansion and upgrading. You should not consider an upgrade, unless you are staying at least five to seven years, in the event of a downturn in the market. However, an expansion of living area will provide an excellent return, because this will create a better price per square foot than your existing home.
However, due to the fairly strong current real estate market, still lower than normal inventory (but that has increased 11.2 percent from 1/1/18-1/1/19 as per the National Association of Realtors) and stronger than normal demand (but that has softened slightly, since the four interest rate increases in 2018, by Fed Chair, Jerome Powell and the S.A.L.T. tax); I don’t believe the market is crashing, just going towards a more normal market and I don’t see it changing much in the foreseeable future, as long as the demand is there.
But one never can totally predict the market, due to local and global events, that occur on a regularly basis. Some volatility will always exists somewhere and this may or may not have a major effect our local markets. No one has a crystal ball to predict accurately the future, unless you’re a magician or maybe the Long Island Medium, Theresa Caputo.
Besides adding living space, kitchens and bathrooms will always add value to one’s home. Again, how much you will budget for will have a direct effect on it’s value, comparable to similar homes in your local area or village. It’s always better to have a home that isn’t the largest one on the block, but a more moderate or smaller home will always benefit from those who build their McMansion down the street.
Always try to think long term when adding substantial sums of money to your home; because you want to make money or at least break even or you just might lose dollars, if a properly and well thought out plan and strategy isn’t devised and laid out beforehand, again with a budge in mind.
Although you have decided not to build a new home; what you may end of doing is gut renovating your current one and hiring a qualified, professional, experienced architect with credentials and reviews, (which you can derive online or call me). They should be responsible for applying for all required and necessary permits as well as your designated contractor doing the work.
Who will be the subcontractor or the person in charge to hire those doing the work? Getting referrals from those who have had work completed satisfactorily is a fairly solid path to take. However, there are times referrals don’t work, because the contractor today, may or may not have the same workers as he had, when his best work was done.
It will be research and time, as well as money well spent so you can convey your vision to your architect and onto his/her drawings and sketches to end up with a solid and successful end result. Go slow and steady, like a turtle and you will end up with the results that you desire and paid for and have a smile from ear to ear and more important, if still married “a happy wife for a happier life.”
Philp A. Raices is the owner/Broker of Turn Key Real Estate at 3 Grace Ave Suite 180 Great Neck. He has earned designations as a Graduate of the Realtor Institute and a Certified International Property Specialist. Receive regular “free” updates of sold homes in your area and a “free” Comparative Market Analysis” of what your home would sell for in today’s market or search on: WWW.Li-RealEstate.Com He can be reached by email, [email protected] or by cell: (516) 647-4289.