Everything You Need to Know About Upgrading to a Bigger Property
As a first home buyer, you would find multiple directions outlined for you on the internet assisting you in taking your first step in the field of property purchase. But what about upgrading to your second one as you climb the step upwards on the property ladder? Even though you have an advantage as a ‘second stepper’ over the first-time buyers, upgrading isn’t as simple as it sounds.
With the increase in your assets, needs, and even family, you might have outgrown your current house and in need of upsizing your home. Regardless of your reasons to upgrade to a bigger property, there are things you need to consider for a smooth property transaction. From increasing your mortgage to arranging a simultaneous settlement, there are many factors to be taken into consideration. Here is everything you need to know about upgrading to a bigger property.
When should you upsize your house?
If upgrading to a bigger house has been on your mind for a while now, it probably is time to take the step forward.
Generally, people think of moving to a bigger house because of their growing family. Be it a new family member on the way or aging parents moving in, a larger home is probably in order. Even though you have no plans of growing a family just yet, having enough space means the freedom to grow later. To some, it might just mean the addition of your furry friends into the family, which requires space both indoors and outdoors. And hence, an upgrade to a larger home seems necessary.
Apart from these, upsizing to a bigger home can be a good move if you are in a better place financially. If your current financial situation shows that you can afford the upsizing, you can move to the home of your dreams in a better neighborhood. After all, the potential location, you are planning your property upgrade to, is just as crucial as the well-arranged financial transaction.
Why Upgrade? Pros and Cons of Buying a Bigger House
When it comes to property upgrades, multiple reasons are triggering you to buy a bigger house. It is never just one reason for people to opt to upgrade their property. Often, it is because your current home is cramped, and you have outgrown it. Or you are changing your job, and it lands you in another state.
However, there are many pros and cons when it comes to upgrading your property. Here are a few advantages to buying a bigger house.
- Aspiring young families are usually the ones opting for upgrading to a bigger house. A larger home gives them the advantage of growing into it both financially and as a family.
- With a bigger home, you can plan to have a family of your own. If you are ready, you can always plan for a baby with your partner or invite your aging parents to live with you.
- Having a bigger home with an extra bedroom or bathroom allows you to host your guests, providing them with a comfortable sleeping area rather than just a couch.
- At times extra space can also be a source of side income by renting a room or two. Renting out rooms can help you cover the mortgage.
- If you are involved in creative jobs, having a space of your own where you can allow your creative mind to grow is always an upside.
- If it comes to selling, larger homes have a higher sales price.
Like anything else, buying a larger home has its cons as well. Some are:
- One of the prominent negative sides of a property upgrade is that bigger house has a bigger price tag. If you have a lot of extra space which is of no use, deciding to buy a bigger house is not a purposeful money decision.
- Larger homes have a larger responsibility. Maintaining a larger home is always expensive.
- With bigger home comes bigger utility bills. Water bills, electricity bills won’t be cheap.
- A larger home requires expensive interiors ranging from furniture to flooring to appliances and even artworks.
The process involved in upgrading a property
While we discussed various reasons why people upgrade and its pros and cons, the execution of the upgrading strategy is quite a daunting task.
The process is financially complex and emotionally exhausting. It involves accessing the equity in your existing property along with arranging for bridging finance if you needed to sell it later. Likewise, you can arrange a simultaneous settlement if you want to buy and sell at the same time. If not, sometimes, you might even have to move out of your existing property in a rented arrangement until you complete the upgrading process.
The nature of the deal itself is a complex one. However, with the help of an experienced finance professional, you can minimize the hiccups along the way.
This probably might be the first time you’ve had to think of selling your property, which includes the valuation of your home, where the condition of your home is the key factor.
Buying your second property is much more complex than you think. There are many relevant confusions involving two property transactions when it comes to property upgrades. You might be wondering about matters such as:
- Can I keep both properties?
- If I needed to sell an existing property, shall I sell it first or after we have bought the second property?
When it comes to upgrading, each route you take may vary depending on your circumstances. If your circumstances allow, it is always preferred to buy your new property first and then sell your existing one later. If not, you can carry out both transactions simultaneously. If both the scenarios don’t seem favorable for you, you can sell first and then by later, which of course, involves living in a rented arrangement until the upgrading process settles.
You can buy a new property first and then sell later by arranging bridging finance. Or you can have both transactions at the same time by preparing for a simultaneous settlement. Or you can also opt for buying a house and land property depending upon your situation. Different circumstances require different measures to be taken. This is why having a professional mortgage broker handling your financial transaction is always a plus point.
So, are you prepared to finally upgrade to a bigger house? Here is our Upgrader Guide Book available to download for free. We have simplified the process as much as possible for you.