Don’t over capitalize your home…

 

While we all want our homes to be the best place to live and we want to make it as comfortable for us as possible, it is important to be conscious of not over capitalizing your home. Over capitalization refers to investing in your property beyond its resale value, essentially this means you spend too much money on the renovations of your property, and should you decide to sell it in the future you are unable to recoup this money. If you are thinking about doing renovations in your home there are a few things to consider to avoid this.

 

The first thing to do is find out the average selling price of homes in the area, this will give you an idea of what is the best price you could get for your house should you decide to sell. While this may be difficult to estimate on your own, you could contact a local real estate agency (Hamptons) and ask for their assistance on houses that have recently been sold in your area.

 

When you decide to renovate a big mistake one often makes is underestimating the costs involved, “how much could it really cost?” Probably more than you think. It is important to have a budget in mind, and work as closely to it as possible and cut costs where necessary.

 

Choose the right contractor – shop around for quotes and only work with qualified builders, as unqualified builders can make expensive mistakes.

 

While you may think you have a niche to do handy work, going the DIY route can also lead to expensive mistakes. Potential buyers are also able to notice a DIY job and will often put in a lower asking price knowing they would need to spend money in fixing the DIY job.

 

While you may want to modernize your house, it is important to match the design of your renovations to the rest of your house. That is not to say you can’t renovate in a modern way, but ensure that the renovations flow with the rest of the house.

 

It is important to remember not every improvement will automatically add value to your property, so invest in the right things, for instance a swimming pool does not always enhance the value of the home to what you spend on it.

 

So remember make your home the best place to live, but do it with the future in mind.