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Friday, September 29, 2017

How Do You Know If You're Ready To Upsize?

Everyone remembers the day that they moved into their family home. They remember how every inch of wall space, every square foot of flooring and every sparkling window just seemed to gleam with promise. But that was then. Over the years (and especially when children come along), the home starts to experience what can generously be described as wear. The odd crack or chip might occur here and there, storage space appears to groan at the seams and what seemed to have the anatomy of a perfect family home suddenly feels cramped and shop soiled. In short, the house stops feeling like a home.


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For some, the problem of an overcrowded home can be mitigated with some renovations. Attic Conversions and extensions can not only help to make the very best of the space you have while adding significantly to the value of your home. If, however, this just isn’t feasible, it may be prudent to consider upsizing to a bigger property to give your family the space it needs and deserves. Moving to a bigger property, however, has its caveats and risks that may not be justified in light of your family circumstances. That said, there are a many different reasons why it might be time for your family to upsize including...


A new addition to the family
Many find themselves considering upsizing if they have a baby on the way. If this is the case, however, it’s important to ask yourself honestly if you can cope with the stress, anxiety and physical activity of moving while in the family way. Of course, your family may be expanding in other ways. More and more people these days find themselves accommodating elderly parents or in-laws into their homes. A larger home may be necessary to give them the dignity and independence that they need.


You or your partner work from home


The rise of digital communications technology has facilitated the rise of the telecommuter with more and more people working remotely from home. This may seem perfect for new parents who struggle to marry their work commitments with the need to give their kids the care, love and support they need before they’re old enough to go to daycare or school.


Working from home is remarkably beneficial to busy parents but it has some caveats. In order to stay productive, telecommuters need to be able to compartmentalize their living space to separate ‘home’ from work’. Nobody wants to be changing diapers or hanging out laundry in the middle of a conference call. This may not be possible in your existing home, so upsizing to convert a dedicated room to a home office may be necessary to stay productive.


Whatever your reasons for upsizing, it’s important to go into the prospect of a move with your eyes wide open, and calculate the many costs. A bigger house will usually mean bigger financial commitments. Some may be obvious, some may be a little less so...


Measure your monthly commitments


Many people are frugal at the start of their career, but as their financial situation improves, it’s easy to become overconfident in their ability to handle the financial commitments involved when moving to a larger property.


Of course, the biggest of these considerations will be one’s mortgage. It’s important to know how much equity there remains on your existing property and how much of a deposit you can afford. A mortgage calculator is a useful tool to measure expected mortgage payments but the mortgage is just the tip of the iceberg.


It’s important to bear the costs of the move itself that may be incurred. These may include:


  • Conveyancing
  • Realtor’s fees
  • Agency fees
  • Mortgage arrangement feeds
  • Indemnity fees
  • Surveys and valuations
  • Broker’s fees


The little things all add up


Larger properties (especially those with large plots of land), will tend to be incur higher property taxes as well as costing more in utilities. Larger houses tend to use more water than their smaller counterparts size and cost a great deal more to heat or air condition according to the changes in season. Therefore, it’s a shrewd move to communicate with your realtor and try to glean an estimate of what you can expect these costs to be.


More than likely you’ll only be paying $10 extra here or $20 extra there, but these seemingly insignificant costs have a tendency to add up.


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Remember that a bigger house will need more maintenance


If you’re the kind of person who gets squeamish at the thought of entire afternoons spent cleaning, gardening or carrying out household repairs then you should think twice before moving to a bigger home. If your hectic work schedule and familial commitments leave you little time to make your house beautiful and spotless you’ll be astonished at how quickly maintaining the place can spiral out of your control. If you find yourself needing to hire a cleaner on a regular basis, then this should certainly be factored into your monthly household budget.


Bear in mind that your new home could be harder to resell


Though only seasoned investors with portfolios tend to buy property with the market in mind, those who buy homes for their families should always at least consider the market when buying. Keep in mind that however well-informed your purchase may be, none of us can predict the long term whims and idiosyncrasies of the market. The last thing you want is to find yourself shovelling your wages into a money pit. Even if you plan to stay in your new home for decades or even the rest of your life, it’s important to at least consider the possibility that you might have to downsize or sell the property at some point.


Should you, heaven forbid, separate from your partner the pressure of needing to sell your former family home in a difficult market amidst a time of emotional distress, this can already exacerbate an already difficult situation. Moreover, if you or your partner should find yourself unexpectedly laid off from your job, or unable to work for health reasons, you may become reliant on your equity and need to access it quickly. This can prove challenging when you’re struggling to sell your property. While remortgaging, is an option, it will inevitably drive up your monthly payments which may not be conducive to your personal circumstances.

As long as you are well prepared and cognizant of the costs and complications, a move to a bigger new home can be an exciting step forward to your family.

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