All Things Real Estate: Expanding your home to stay where you are

All Things Real Estate: Expanding your home to stay where you are

You’ve been searching high and low for another home to purchase with more space for your growing family and for working remotely.  Maybe it’s about your location, better schools or having your in-laws reside with you to watch your children. Whatever your reasons are, this market has been very stressful for those looking to move.

Even for those first-time buyers, losing bidding wars or not being prepared sufficiently enough by losing that all-important piece of paper called the commitment letter, getting stuck in your current situation, whether it is staying in your current rental or living with parents or in-laws has its pluses and drawbacks.

But solutions are hard to come by as the inventory is at historic lows, and interest rates are causing monthly payments to exceed many budgets.  There are no extra dollars to be had to compete with the vast number of other purchasers who are vying for the same limited number of homes that are for sale.

Those who are already in a home in a desirable location with excellent schools have an option to consider expanding their footprint and go through the construction process, especially if a room for your job or business is a mandatory requirement.

I get it, it’s not an easy task or decision to make, especially if you don’t want to rent another place and go through that additional expense while your home is under construction.  However, you could consider staying in your home while construction is underway as my daughter did when she purchased her new home in 2022 but locked in her financing in December of 2021.

She, her husband and children lived in one section of their home, while the other part was renovated.  It’s not an easy path to take, but it can be accomplished with some concerted effort, stick-to-itiveness, determination, and perseverance.  Obviously, it will save you a lot of money and you can see the daily progress as it unfolds showing you all the improvements.

As far as inconvenience, there will always be some, but as they say, “no pain no gain.”  The contractor can completely seal off the areas properly, so the dust can be pretty much minimized as was done in my daughter’s new home.  Interview at least three to five contractors and get referrals and recommendations when hiring to make sure that the company you hire will start and finish the job within certain time constraints.

Even paying a little extra bonus may incentivize your contractor to complete your renovation sooner or at least in a timelier manner.  One issue that I will convey to you is depending on the level of quality and the availability, especially if they are high-end, is to order all your appliances right from the beginning as it took my daughter 16 months with the delays and supply chain and production issues to get her Subzero refrigerator.

Another important item to consider is your budget for the upgrades and improvements. Will you be financing or paying outright for the job?  You could also think about a HELOC (home equity line of credit).

This could be less money depending on your relationship with your lender and/or who you borrow from. This type of financing can be used and interest is only applied when the money is utilized as you will be paying your contractor a portion of the total as each step of the work is completed.  Start with your bank and check a few others for comparison.  You can do a secured loan if you have the necessary funds as this should provide you the lowest rate and cost.

If you work remotely at home, then there is an allowable tax deduction equal to a percentage of the total number of rooms being used overall for your business.   So if you have five rooms and use one, then you would have a 20% write-off on all the expenses in running your home, including your mortgage.  But I would advise you to always speak to your CPA to know the exact extent of your benefits from working at home.

The working environment will never be the same after the Covid-19 pandemic.  The hours lost traveling to and from work can now be utilized either by being more productive or adding to your quality family time.  I am quite positive that many will no longer have to go to their normal offices anymore.

There have been some conflicting studies ( May 26, 2023, and Jan. 3, 2023) with some saying working remotely is more productive than being in an office environment and some saying the opposite. It’s all up to the individual and how they approach their work.

But for a majority, studies have shown that the work-life balance increases productivity and enables a healthier lifestyle.  So staying put, upgrading, and adding space just might be the solution to not having to move.

Consider contributing to those who lost everything in the devastating fires on Maui, Hawaii: click here: Maui Hawaii Relief Fund

Philip A. Raices is the owner/Broker of Turn Key Real Estate at 3 Grace Ave Suite 180 in Great Neck.  For a free 15-minute consultation, value analysis of your home, or to answer any of your questions or concerns he can be reached by cell: (516) 647-4289 or by email: [email protected] or via https://WWW.Li-RealEstate.Com


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