Jump to content

The Extension vs Buy Elsewhere game


  • Please log in to reply
13 replies to this topic

#1 LEGs-R-US

Posted 25 February 2013 - 07:00 PM

APOLOGIES LONG STORY

So Dh and I currently live in a hohum suburb in Canberra.  I'd like to think better street in the average suburb.  

I like the house at the moment and to be honest the area is quite nice (I think it just has bad stigma).  I'm a ten minute (or less) drive to work and can walk to the local shops in like five minutes.  I have beautiful views of the Brindabellas (think snow sprinkled on them in the winter) and we have a killer deck that melts everyone's hearts when they visit.  BUT with all these positives it is small.  It is a small three bedder (think no two single beds fitting in bedroom two and three and you have to have bunks - I have three kids), a pokey en-suite (but hey it has one) and one living area.  A roomy family room that is actually the dining room (because the dining room is a walk through).  The house currently valued would RRP for around 450K.  We are yet to renovate the existing 1980s bathroom and en-suite.  We have been told if we do this we could expect 475/480K.  We have pretty much renovated every inch of the property except the bathrooms.. it has my soul in it!  

DH and I have just locked in the extension plans we love.  It makes it a double story four bedroom home with a massive rumpus upstairs that takes in the amazing views.  The builders quote is 280K.  I think this is probably reasonable but is 30K over what we were maximum budgeting for.   This is driven by the fact I want to budget for an additional 50K for the bathroom renovation and any overspend we might have.

So now we are looking at what we get for value.  With the extension we are certainly over capitalizing.  If I can sell the house for 450 today and then add the 280K I have like a >700K house.  The maximum ever reached in my suburb is like 620K. Over capitalizing YES.  In saying this we bought the house many years ago so we own half of it... long story short... we would need a <500K mortgage and if we needed to sell would come out in front.  But obviously not as much in front if we sold today.  

If we purchased elsewhere around the same 700K budget in Canberra I can't get anything I like.  I have my 'love' surbubs that I want and DH wants it pretty much renovated.  To marry our needs we'd probably need closer to 800K.  

So what would you do?
- do the extension knowing full well you are overcapitalising by about 80K (but acknowledging we have no selling/stampduty costs).
- buy a house worth 700K and one of us has to compromise (either on suburb, inclusions or renovation).
- buy a house worth 800K and throw the budget out the window.  
(In options 2/3 we know if we need to sell for some reason we'd get our money back).

Dh's family think we should go ahead with the extension as they know the views and can see it would become our forever house.  My parents are much more buy elsewhere and ensure if we need to move we'd be able to recoup our money. DH and I are hopeless at decision making.  My heart is lending towards the extension but my head is saying move to the 700K option.  


#2 *LiMa*

Posted 25 February 2013 - 07:06 PM

I don't know which option I'd choose tbh, but $50000 for a bathroom Reno?  Have you priced the renos you want yet?  It seems excessive to me (I work for a company that sells bathrooms)

#3 Hands Up

Posted 25 February 2013 - 07:07 PM

If you are planning on staying long term I vote for the extension. No real estate fees, no stamp duty. Just be warned that a lot of extensions typically over run by 10% cost wise, no matter how well you plan!!!

#4 LEGs-R-US

Posted 25 February 2013 - 07:11 PM

Oh sorry LiMa.. the 50K is to cover bathroom reno (+ensuite).. I'm envisaging say 15-20K here and then the rest for any budget blow outs of the build.  If at the end we haven't got the budget blow out we would want to spend it on solar panels.
  



#5 *LiMa*

Posted 25 February 2013 - 07:15 PM

Lol that makes so much more sense.  I was mentally running through our most expensive products trying to come up to $50k and was wondering if we are under charging lol

Ive been thinking about it more, and I think (given your views etc) I'd extend and stay

#6 Goggie

Posted 25 February 2013 - 07:41 PM

This will be us in about 8 years OP. we need to pay off two thirds of our current mortgage before we will consider an extension and total inside renovation of the existing house as I know how expensive it will be. It's a tough decision because you never know how the area will increase in value over a long time.

In your example, I'd either extend, or blow the budget and buy the perfect house. I wouldn't take option 2, too many compromises.

#7 DrFeral

Posted 25 February 2013 - 07:45 PM

Probably not what you want to hear but given the planned cuts in the public service I'd not want to be overcapitalising in the current (possibly overpriced) Canberra market.  Just my opinion!   If you can be patient there may be some "bargains" to be had in the not to distant future (my guess 12-18 months) on existing housing.

#8 Jembo

Posted 25 February 2013 - 08:35 PM

Is your block so that you can still do extensions, without having to go up?  I know it means not capitalising on the view, but you could possibly increase your house size without having to spend quite so much.

Rather than doing extensions you love, is there a compromise you could be happy with?

#9 josh2003

Posted 26 February 2013 - 06:19 AM

We just went through the same thing. We bought our house (10 squares!) 5 years ago with the intention of extending it. We had our plans ready to go, and started getting quotes, and it was looking like it would be cheaper and easier to sell and buy something already done. The problem was, what I "wanted" was only available in the more expensive neighbouring suburb, and had a price tag of around $1.3 mil.

We could have bought something with enough space for less, but we would still need to spend more money to finish it in our style.

So, we went with the extension option, and we did it as owner builders (although with a qualified builder doing the work!). We haven't quite finished yet (still need to add skirtings/archs and put the new kitchen in, new back garden etc.) but it's the best thing we've done. My heart still flutters when I look around and see how beautiful it is, and I can't remember any of the houses we looked at, even the $1mil + houses that were as good.

Financially, although we've increased the value massively, we probably don't have much more equity than what we had previously, and it's been exhausting because we have done a lot of the labour work ourselves. But, we do have a house we love!

I think it all depends on your personality. Some people are more practical and are happy to have an okay house with the right layout etc., while others want their house to be beautiful. If you're the latter, then I say go for the extension.

#10 Mozzie1

Posted 26 February 2013 - 06:39 AM

How much will stamp duty, agents costs and moing costs be? That might narrow the gap a bit, and make the extension seem like a better option.

$300k for an extension in a suburb with $400-$600k ousts sounds like a lot to me, but I am very much in the non emotional, financial decision making camp. If you think you won't come to regret spending
$80k you will never get back, the extension does sound like the better option.

#11 seepi

Posted 26 February 2013 - 06:40 AM

I wish I knew the answer  we are in the same situation  no ensuite though, but massive lounge, but tiny bedrooms  no room for two single beds here in one of our rooms either.

One other cost is where would you live while renos are done?

also , homes with stairs have very poor heating and cooling costs, as you can't shut off one level from the other  all your heat flies up the stairs.

I've decided i can't live through renos. But I'm also not keen on the whole selling/buying exercise, so we're just going to put up with it for a bit longer. I'm going to try to save up to buy what I really want, in our same suburb...or win lotto.

I do wonder if houses will be a lot cheaper in canberra in a year or so  but that means losing a lot on the home you are selling as well..

#12 katpaws

Posted 26 February 2013 - 06:58 AM

I think that the $280,000 will probably hit more the $350,000 mark. I am not sure of ACT prices but we paid that($280,000+) for a single extension in Vic.

We paid $250,000 for the house originally and maybe all up  $350,000 for the renovation. I think we could sell for $800,000 to 1m. Quite a few houses are selling in the area now for excess of 1m. We did not want to move or pay stamp duty and we live in a very good area in the suburb. I don't think we would have renovated if houses were not selling for those amounts; i keep a strong watch on the propery market here. We can't lose money on the house now, even if the market drops a bit.

Where are you going to live during the build? We moved three times during ours.

I also found the whole experience stressful and draining. Dealing with the staff from our builder (volume builder) was a nightmare at the end of the build. That made a pretty much easy build/reno into a very unpleasant experience. We had good tradesmen (we brought them in) and some fantastic outlet stores (saved us heaps on appliances etc) that saved my sanity.

Are you using a volume builder?  You need to investigate whoever you are getting to build. Make sure you have recommendations (not online ones!) and see their work. Make sure you read your contract very well before you sign it. I would advise getting a lawyer to read it as well. On paper building seems easy and uncomplicated but you have to be very careful who you choose to build with, very careful, or your dream house will turn into a nightmare one.

I spent yesterday at VCAT (Victorian Civil and Administrative Tribunal) with friends who was treated badly by their builder (volume builder) and due to this builder has now lost their health, their retirement money and will most probably lose their home to pay for the lawyers and repair the work the builder did (which they will do at a loss as the builder ****ed it up badly). Another friend two years on is still not able to move into their home as it is unfinished and built to a poor quality, another one who has lost their job, retirement savings and has paid out $$$$s in legal and other fees, just to live in their house again.

Doing a reno is a big step to make. Do your homework about the benefits and costs of what you want to do. If you are going to overcapitalise with a reno, personally i would recommend finding a house that is what you want that is already established in another suburb.

Edited by katpaws, 26 February 2013 - 07:32 AM.


#13 Bluenomi

Posted 26 February 2013 - 09:19 AM

In Canberra it is nearly always cheaper to move than renovate. Overcaptialising in Canberra is a huge risk, even in our overpriced market.

A friend recently got quoted on a reno and knock down rebuild on her place in Kaleen, the cost was the same for either option  ohmy.gif She took the rebuilld option since she's much more likely to get her money back with a new house than with an extention if she needs to sell.

#14 Sentient Puddle

Posted 26 February 2013 - 09:33 AM

As someone who used to live in Canberra in the Belco area - I would be very worried about over capitalising.  You might think it is your forever house - but what if your circumstances change and you need to move cities and cant recoup what you have invested in the house.  I only would consider a costly renovation in an inner ring suburb, or at least a suburb where some houses are valued at that total of what your house would be worth. Sorry.




0 user(s) are reading this topic

0 members, 0 guests, 0 anonymous users

 

'I will defend my son's right to wear a tutu'

Three-year-old boy Roo likes to wear tutus and, until now, it hasn't been a problem.

Chinese sign up toddlers for chief executive classes

CHILDREN as young as three are being enrolled in "chief executive courses" in China as pushy parents become obsessed with giving their offspring an advantage over their young peers.

Free ticket offer

Pinky Mckay joins us again at the Essential Baby & Toddler Show presented by Blackmores with her expert baby settling advice. Register now for your free ticket.

The 'best little baby' and the police officer who rescued him

"And just in my head, I'm a father myself, and I couldn't sit there and let him ... I couldn't let him sit in that."

Olympian sells medal to pay for child's cancer treatment

An Olympian has sold his medal to help fund cancer treatment for a 3-year-old boy.

Family of mum who took her own life speak out about PND

From the outside it looked like Allison Goldstein was blissfully happy. She had a new baby, a loving husband, and was part of a close knit-family.

For the festival lover in all of us

Pre-book & Save 50%. Get your tickets now for Kidtopia Festival. 7-9 October 2016 Parramatta Park, Sydney.

BuggyCart solves the dilemma of shopping with a pram

Ducking to the shops for some groceries is a whole other ballgame once you have a baby.

Viral photo shows powerful moment before second baby's arrival

While our second baby was very much wanted, I wondered if I could love another baby as much as I loved my first.

What does a baby with whooping cough sound like? Sometimes like this

It's a heartbreaking video that's difficult to watch, but that's just what Sydney mum of two Sandra wants people to do.

Cheers! Why we're all happy to be bad mothers now

A new generation of mums is resisting the pressure to be "perfect" - and revelling in their naughty side?

Dealing with mealtime fussiness: mums share their tips

It can be frustrating, worrying, and turn into a battle of wills - but it doesn't have to be like that

Why having a puppy is like parenting a child

Despite being a dog owner and a parent, I've never been able to relate to the idea that the two have many similarities – until now.

Baby Joey is sleeping star in adorable photos

When photographer mum Laura Izumikawa puts her baby daughter down to sleep, the last thing on her mind is rest.

The necessity of 'Do not disturb' signs for napping babies

Needless to say, the last thing any mum wants is for someone to loudly knock on the door and wake their sleeping cherub.

Mum's brutal truth about c-section: 'This is not the easy way out'

A new mum has shared photos of her caesarean section scar to prove she did not "take the easy way out" when giving birth to her son.

Twins give birth in same hospital just hours apart

Leanne went into labour on July 28, and remarkably, her twin sister Natalie soon followed.

Goki Ride-On cars for toddlers

Toddlers just love to ride on anything with wheels but will often reject the pram once they can walk.

Letting your health slide as you look after the kids? Here's how to get out of the trap

It's time to start prioritising our own health, as well as the health of our children, to avoid longer lasting health challenges.

How to child-proof every room in your house

A guide to making your home a safer place for little ones.

Portable pool safety reminder after toddler's death

The drowning of a Hobart toddler has prompted a coroner to remind the community that even inflatable and portable pools must be fenced.

I have a clingy toddler - help!

"Nothing stops the clinginess - he cries when I put him down, no matter how long I hold him."

Woman sues after botched termination leads to motherhood

A 23-year-old mother is suing her GP and the public health system for thousands of dollars to support her son after her termination went wrong.

 
Advertisement
 

Top 5 Articles

Advertisement
 
 
 

What's hot on EB

For the festival lover in all of us

Pre-book & Save 50%. Get your tickets now for Kidtopia Festival. 7-9 October 2016 Parramatta Park, Sydney.

Ex-Perth model stuck with 12kg leg after limb doubles in size during pregnancy

"I often have strangers coming over to me when I'm out asking bluntly what's wrong with my leg. I often just laugh now and tell them I've been attacked by a shark and walk off, it definitely stumps people."

Same sex couple 'blessed' with triplets via surrogacy

They feared they would never get to be parents, but a same sex couple is now adjusting to life with newborn triplets.

Should children be given antibiotics in their first year?

Here are the the pros and cons of giving antibiotics to young babies.

Baby born on mum AND dad's birthday

The birth of a baby is always a special occasion, but one couple who welcomed their first child earlier this week had more reason to celebrate than most.

The joys (and benefits) of show and tell

Show and tell has been around for donkey's years. Well, at least since I was a kid, and according to my own children, I'm pretty old.

Loyal dog dies saving baby's life during fire

A baby was rescued from a house fire after her family's loyal dog used his body to shield the little girl from the flames.

How having a young baby or toddler changes your home decor

What to expect when living with an older baby or toddler - and how to manage the chaos.

I'm trying to keep my child-free friends in my life, but it's tough

I tried to prove to my single friends that I was the same I'd always been. But marriage did change me - and motherhood has, too

'There's a giant picture of BOOBS but I can not feed my child'

A mum was ushered out of an US department store's underwear section after discreetly breastfeeding her baby.

How baby Evelie was saved after being born without a heartbeat

Bethanie Millar didn't believe in miracles - until baby Evelie was born, that is.

How an Aldi staff member made one exhausted mum's day

It was a simple act of kindness, but one that made an exhausted mother's day.

OvuSense: the new internal monitor helping predict ovulation

When a couple is trying to conceive it is easy for a woman to become obsessed about when she ovulates.

Mum-to-be surprises husband with big news in joy-filled photoshoot

When Bri Dow learnt that she was expecting, she immediately knew she wanted to break the news to her husband Brandon in a special way.

How a homemade wheelchair is giving baby Evelyn freedom

Like all one-year-olds, Evelyn Moore is keen to get moving and explore the world around her. But a battle with aggressive cancer left the little girl paralysed from the waist down.

Adorable: App captures special moments of pregnancy and motherhood

There's something about motherhood that turns even the most reluctant photographer into a keen shutterbug as they strive to capture all the best moments of life with a baby.

Dad shares horror tale after Roomba's run-in with dog poop

It's the poop story that's been shared hundreds of thousands of times around the world.

 

SYDNEY SHOW - 23-25 Sept

Essential Baby & Toddler Show - Sydney

The Essential Baby & Toddler Show, presented by Blackmores, will be held in Sydney on 23-25 September. Register for your free ticket now to save $20!

 
Advertisement
 
 
Essential Baby and Essential Kids is the place to find parenting information and parenting support relating to conception, pregnancy, birth, babies, toddlers, kids, maternity, family budgeting, family travel, nutrition and wellbeing, family entertainment, kids entertainment, tips for the family home, child-friendly recipes and parenting. Try our pregnancy due date calculator to determine your due date, or our ovulation calculator to predict ovulation and your fertile period. Our pregnancy week by week guide shows your baby's stages of development. Access our very active mum's discussion groups in the Essential Baby forums or the Essential Kids forums to talk to mums about conception, pregnancy, birth, babies, toddlers, kids and parenting lifestyle. Essential Baby also offers a baby names database of more than 22,000 baby names, popular baby names, boys' names, girls' names and baby names advice in our baby names forum. Essential Kids features a range of free printable worksheets for kids from preschool years through to primary school years. For the latest baby clothes, maternity clothes, maternity accessories, toddler products, kids toys and kids clothing, breastfeeding and other parenting resources, check out Essential Baby and Essential Kids.