The family is ready for summer fun on the lake, but is the house ready for festivities and guests? Has the invitation list grown with more friends, older children, new grandkids, while the house stayed the same and strains under the weights of change? Some people decide to fix this dilemma with a new lake home, and others decide to stay in place.
For one family, cold showers, small bedrooms and an old kitchen could be too much to deal with, even if it is only overwhelming in the summer months. Another family might see the quirks, dings and inadequacies of a home as endearing qualities that need few adjustments. Both families are in search of necessary change; they just have diverging paths to achieve the transformation of their lifestyles.
Making these types of decisions often is difficult, and it is only exacerbated by the strong market and low interest rates we are experiencing now. Is it smarter to sell and reinvest the profits in a new home? Or does the family consider all the nostalgia and benefits of a high-equity position and stay where they are by upgrading, altering or expanding the footprint of the beloved home? And don’t forget that some of these homes have been in one family for multiple generations.
Knowing that new is not always better and old is not always obsolete ignites the minds’ ponderings. Weighing the pros and cons of a new direction for the family and investment is a serious matter that should be fully investigated before arriving at a conclusion about which direction in which to move. Money sits in both columns, as the benefits of taking it out of the house to invest in a newer or more accommodating home are compared to putting money back into the house for a higher return on the current equitable value. Additionally, where does land value benefit or confuse the equation?
One family might trade their summer or year-round favorite for the bright shiny new construction down the way, while another family decides to gain space by adding a second story, expanding the footprint of their beloved homestead or even tearing it down and building a new structure in its place.
Who made the right decision is as varied as the available scenarios in the decision-making process. Both families can achieve their own best result by working through it in a careful and deliberate manner.
The family that trades their current home will be happy with their move if they made the right kind of lists for their new space and considered their needs not just to achieve a different feeling or look. Lateral moves in size and quality are rarely satisfying, unless entering a higher equity market and retaining the same land position near or at the shoreline. Be careful not to trade fond heartbeats and a great location for a new penny.
The family that decides to stay in place and make improvements will get a lot of new and shiny gifts from their old faithful structure or grounds if they make changes based on current and future needs. Care must be taken not to over improve to make up for not getting a completely new home. Staying the course might mean accepting some of the quirks and problems that made the family consider a move in the first place. Equitable value has a ceiling no matter where a person lives. Can familiarity and a few changes make up for not buying new?
Let’s talk a little about value gains and value retentions of improving a current site with consideration of neighborhood and/or location.
It is best to avoid improvements that are not characteristic of the area, such as pools, reducing the number of bedrooms or adding expensive luxury items that will wear out quickly. Due to the nature of lake living, over customization often does not lead to more value. Avoid extensive landscaping that’s better suited for estate living and not lake living.
On the other hand, if you add the things that help your family and friends enjoy the space without worrying about adversely affecting the value, you win on all levels. Improvements like new kitchens and bathrooms, erosion-proof landscaping and other eco-friendly efforts are solid investments in a lake lifestyle, as are a new stronger roof, energy efficient windows and even the addition of a new deck or boat slip.
All in all, new and better are very subjective terms. What works for one person is not always enough for another person. Only deliberate thought, the right questions and an ample amount of research can get you to your best result.
~ Stephanie Coley is a certified design and construction professional with more than 22 years of multi-discipline experience. Follow her on Instagram @scenariodesigninc or contact her by email at email@example.com.