Extend or not to Extend
Many people wonder about extending their house or a property that they own and wonder if it is worth doing. This all depends on the purpose of the extension. If you want to extend so that you have more room in your family home, then as long as you have the finance in place and a realistic chance of having the planning approved then there shouldn't be a lot to think about. However we often get asked if it is worth extending a property for commercial or economic gain and this is again dependent on a number of factors. Consider the following:
1. Cost of planning and total build. What value is this likely to add to your house?
2. What is the ceiling limit for properties in your area. You may think that a large extension will add a lot of value but not necessarily.
3. Is it likely to improve the saleability of your property or is a larger property not the type that is in demand in your area.
4. Are you looking to rent the property. If it is a HMO then the extra space is likely to pay for itself over a given period of time if it means you can have another bedroom or two.
5. What finish do you want to go for and is it in keeping with the value of the property. An example to think about is a £5000 kitchen. If this is fit into a property valued at around £80,000, although it is likely to add value to the property it is unlikely to add the 6.3% required to break even. However if this is fit into a higher value property then it is much more likely. Therefore the level of finish is a key factor.
6. Fees. There can be many fees associated with building a new extension and following sale of the property. From planning fees which can quickly add up to Solicitor fees and Estate agency fees up on the sale of the property not to mention capital gains. It is always sensible to cost an entire project from start to finish and include all fees and contingency of around 5% of the estimated project cost.