DON’T OVERCAPITALISE WHEN DOING UP YOUR HOME

EVER since the pandemic hit, the trend for home renovation projects has increased.

But Adrian Goslett, regional director and chief executive of Re/Max of Southern Africa, advises homeowners always to consider the resale value of their properties before spending a lot of money.

“Even if the homeowners have no intention of selling in the near to far future, it is always advisable to consider how the renovations could impact on the resale value of the property.

“Shoddy workmanship could have a negative impact on the home’s value. Similarly, homeowners might never make their money back if they have overcapitalised on renovations.”

To avoid overcapitalising, Goslett recommends having a real estate practitioner professionally evaluate the property and suggest guidelines on a potential price cap in the given suburb.

Once the project has been decided on, there are several ways in which a homeowner can fund a home renovation. The first is simply to save up until they can afford to tackle the project. Alternatively, those who have an access bond could access the funds through their home loan. Goslett says this would be one of the most affordable ways to access credit.

“But, unless you’re near the end of your loan term, I would caution homeowners to repay the loan as soon as possible. Interest accumulated over a 20-year home loan period will work out to be far more expensive than a personal loan taken out over two or three years.”

Those without an access bond facility could take out a personal loan to fund the project but this will be at a much higher interest rate, he says.

HOMEOWNERS must be sure to not to spend to much when renovating. PICTURE: IMMO RENOVATION/UNSPLASH