Economic sense & Investing in your Home
For most of our clients, any ideas or schemes we come up with have to make economic sense. Without wishing to blow our trumpet too much, we are pretty good at coming up with ideas that enhance a house so that the cost of the work is more than recouped when sold. However the current occupiers can get the benefit from the enhanced layout until then. In times like these when most investment opportunities are volatile at best, just plain risky or give a very poor return, investing in your house make even more sense than usual.
That is clearly the belief of some of our more mature clients, who having saved all their working years and now see all the usual investment safe havens ineffective or scary. Of course to cash in the investment in your house usually means selling and moving you may think. Well not always, since renting part of the property, which is what some of our more canny clients do, may be an option. If you ask your accountant, he can tell you about the tax advantages in taking in a tenant and what we ( Building Tectonics ) can do is to guide you through such a design process. And design in the wider sense is key here. To create a successful annex to a house many aspects have to be considered such as the often overlooked sound insulation aspect. Another very important aspect for most projects like this is to make sure you do not make changes that require a Planning Application. The last thing you need is a planning battle, especially after spending money on the alteration work – if you think the stock market is fickle you certainly will not like to gamble with the vagaries of the UK planning system.
Of course the other more common way earn from your home is to enhance and move. Some client at this point down size house, but some, the more energetic shall we say, become serial house improvers and almost nomadic in their lifestyle. The tax advantages in enhancing you own domestic property is well-known but you will have to talk to your accountant if you want to make sure you do not get taxed on the capital gains.
If you are considering any of the above then it is also important to have some regard to the location of the property. Location, location, location is what they usually say but what I say is Location, statiON, educatiON. Clearly good access to work and good schools is regarded as the winning formula but there is another way of looking at this. If you own a house in a good “ON” area then fine, but if you are buying then you will be paying top dollar for your investment to start with. That’s not to say that improving a house in a good area is to be shunned but it may not be in your price range. What is key is to match the nature of the end product to the local demand. We have a housing shortage and so there is someone waiting to live in your house, flat or pied-à-terre for sure, but remember that you want to be in a position to choose who rents from you if you rent and you want to be able to command the best price when selling. The strategy is of course the same, good design but, and this is a very big but, not at any cost. The design has to make economic sense.
Written by Tony Keller – Building Tectonics Ltd.