Rebuild Or A&a For Terrace?

[Aiky 0]

Hi all,

I bought a 2-storey FH inter-terrace in original condition of over 30yrs. Now grappling with whether to do an extensive A&A (say <$200K) or rebuild to 2.5 storey with dramatic increase in GFA, plus a new attic floor cum roof-top (say $400K).

I don't really need the extra space but ofcourse its nice to have a bigger house. If I keep to A&A, I can pay off more of the mortgage and reduce my interest by quite a fair bit.

Question is from an investment point of view, is it worthwhile to rebuild? If I re-sell later on, will I be able to recoup the additional investment or better still, fetch higher prices?

Grateful for any views pls, esp those who have gone down this route before. Cheers.

[waileong 0]

Rebuild will likely cost a lot more than $400k. Estimate is about $150k per storey. That only gives you a bare shell. The whole interior-- from flooring to electrical work to carpentry to furnishings-- will be extra.

From the investment point of view, price depends very much on built-in area, of course you'll be able to sell it for more than a unit of less area.

Remember A&A cannot use CPF, but rebuild can use CPF. This will help the servicing of your loan a lot.

Edited October 8, 2007 by waileong

[zirhk3355 1]

Price is not only dependent on build-up area, but also affected by the condition of the unit. Although reno has its depreciation, I am quite sure a rebuilt unit can fetch a few ten-grands over a 30-YO, original intermediate, no matter how long later. For A&A, it will depreciate to zero after a certain no of years.

If its true that rebuild can pay by CPF (not too sure abt that...), then definitely will be my option in your shoes. I think you had underestimated the A&A too, if the unit is really 'original condition'. I got a relative who also has an intermediate and really went all the way for A&A and decor, he spent near to $300K. Now regretting it...

[Aiky 0]

Tks - its expensive to rebuild!

I shd have been more specific - my bad. I didn't mean complete demolition and rebuild which I can't afford, but rather to add another half story and roof top and then to extend the back. This may necessitate partial piling at the back (which is likely to blow my budget), pending structural engineer's calculations.

My contractor's initial assessment however is that the existing structure shd be able to take another half storey without having to do piling. Assuming no piling is required, he gave a rough quote of 400K, including extensive redevelopment into 2.5 storey and interior (closets, flooring, stairs, lighting, kitchen etc). This is based on another house he did, which we saw and liked.

I guess the whole exercise of this thread is for me to justify the extra cost of going the whole hog. A concern is that if I spend say $400K, subsequently it wld be difficult to sell the terrace at that incremental value w/o taking a huge loss. Guess I might as well state that I bought the place at 1.15mil.

Overall, in my assessment, its worthwhile to spend more becos:

a. the terrace is in a nice location (IMHO ofcourse) and thus worthwhile to do up nicely

b. pple will pay more for larger space (just a question of how much more)

c. extra flexibility for future needs

d. if already going to do extensive reno, might as well go all the way in one go

e. finances permit

Cons:

a. keeping to nice A&A is sufficient for current needs

b. its easier to recoup $200K

c. maintain cash liquidity and lower monthly mortgage

d. less reno means less areas and likelihood to run into problems!

Tks, Zirhk

I spoke with 2-3 contractors (recommended by other landed folks) and their estimation is 200K for extensive A&A. I don't think they are quoting low just to get the work as they are quite established and have a fair bit of referrals. It cld be my expectations and their understanding of what I want differs! !!

I already have all my furnitures and equipment from current place. Mostly quite new so shdnt have to spend too much on furnishings. We are also not into fantastic designer decor, just simple, quality (yeah, I know that's exp) and easy to maintain. Nothing complicated, just bright airy, pleasant with lots of space!

Edited October 8, 2007 by Aiky

[zirhk3355 1]

OIC - I think both works you considering are under A&A, no?

Ok let's assume your budgets are correct because only you know best what you want.

However, its not quite correct to say its easier to recoup $200k compared to $400k, because the latter includes larger build-up, which translate higher price. While for the former, in the eyes of a valuer, all reno works will depreciate to zero one day, which means you will never recoup that $200k.

In essence, notwithstanding price increase due to other factors but just based on RENO alone, you do $400k you can recoup some of it, while you do $200k you can't recoup anything.

[Aiky 0]

I think adding a half storey (raising the roof) and extending the back should go beyond the definition of A&A. Which makes it no longer A&A but not yet a complete rebuild (so cannot qualify for CPF). sounds like britney song.

I do take your pt however abt not being able to recoup as much from plain A&A or that its perceived value regresses to almost zero over time. Useful perspective since I have never reno before.

Edited October 8, 2007 by Aiky

[yoongf 11]

If no demolish cannot use CPF.

http://mycpf.cpf.gov.sg/CPF/Templates/SubP...EHINT=Guest#Q12

[waileong 0]

No one can forecast the future direction of property prices until they become obvious. In other words, who knows whether you'll make a loss? The only thing that is reasonably certain is that, other factors being equal, a bigger house sells for more than a smaller house.

I guess the whole exercise of this thread is for me to justify the extra cost of going the whole hog. A concern is that if I spend say $400K, subsequently it wld be difficult to sell the terrace at that incremental value w/o taking a huge loss. Guess I might as well state that I bought the place at 1.15mil.

[yoongf 11]

These type of decisions.. if u want it.. get it.. cos if u dun.. next time, u will always be thinking of it.

Focus on the attic and rear extension. Focus on the massive works that can only be done when the place is vacant. Tell QP u want to build to "maximum envelope".

The other trick is to change the exterior appearance so that the house does not resemble any of the neighbours. Use tons of frameless glass walls to get the impressive look. This will add value to your home, and validate the A&A effort, and impress.

Financially ok landed property owners like to do up their places over time.. say.. every 2 yrs.. add a koi pond.. trellis... so.. no point one time do everything.. cos it is natural to want to improve bit by bit over time.

From an investment perspective, land price + A&A cost... should not exceed the most expensive new house along the same street. If not.. it suggest u paid too much for the land in the first place.

[Aiky 0]

Tks, very useful advice. I agree, if wan, then shd just get it within means ofcourse.

A a general guide, how much safety buffer shd I set aside as a proportion of reno costs?

[yoongf 11]

Frankly speaking.. for A&A.. there is no per unit ballpark figure with regards to reno cost, as each job has unique constraints. Different existing structures, different finishes.. sometimes when got live in residents, meaning working hrs are constrained..

When owner on site so often.. sometimes.. very fickle.. after build a wall.. then decide dun look good.. hack off..

Sometimes.. got unique requirements where materials not commonly available..

It does help to go ard snap photos of other ppl's house and then compile a scrap book to show contractor your expectations for the purpose of quotation.

[lzh 0]

My contractor's initial assessment however is that the existing structure shd be able to take another half storey without having to do piling. Assuming no piling is required, he gave a rough quote of 400K, including extensive redevelopment into 2.5 storey and interior (closets, flooring, stairs, lighting, kitchen etc). This is based on another house he did, which we saw and liked.

Hi Aiky

May I know what's the existing floor area & proposed additional floor area?

1 contractor quoted $300k for my 2-storey semi-d with existing floor area of 130sqm & proposed front extension of 60sqm, & this excludes Engineer's fees, landscape, fence & reno (i.e. flooring/tiles, electrical, plumber work, sanitary fittings, carpentary).

[Aiky 0]

I think semi-dee gets different pricing in terms of psf because its usually much larger and has more sides to do up, compared to intermediate terraces. Semi-dee owners are also perceived to be more price inelastic, I suppose

Not used to metrics, but my current built up is about 2000+ sqft and the additional area should bring it slightly past 3000sqft. No specific numbers yet because we haven't even reached the drawing stage. Verbally, my contractor's quote supposed to include all fixtures eg lighting, closets, plumbing, electricals, fence and gate, and roofing etc. Basically everything except furnitures, soft furnishings like curtains and appliances. He did tell me to get my own structural engineer first tho to ascertain if piling is required, which he agar engineer costs around $10K.

[mafiawife 0]

Tks - its expensive to rebuild!

I shd have been more specific - my bad. I didn't mean complete demolition and rebuild which I can't afford, but rather to add another half story and roof top and then to extend the back. This may necessitate partial piling at the back (which is likely to blow my budget), pending structural engineer's calculations.

My contractor's initial assessment however is that the existing structure shd be able to take another half storey without having to do piling. Assuming no piling is required, he gave a rough quote of 400K, including extensive redevelopment into 2.5 storey and interior (closets, flooring, stairs, lighting, kitchen etc). This is based on another house he did, which we saw and liked.

I guess the whole exercise of this thread is for me to justify the extra cost of going the whole hog. A concern is that if I spend say $400K, subsequently it wld be difficult to sell the terrace at that incremental value w/o taking a huge loss. Guess I might as well state that I bought the place at 1.15mil.

Overall, in my assessment, its worthwhile to spend more becos:

a. the terrace is in a nice location (IMHO ofcourse) and thus worthwhile to do up nicely

b. pple will pay more for larger space (just a question of how much more)

c. extra flexibility for future needs

d. if already going to do extensive reno, might as well go all the way in one go

e. finances permit

Cons:

a. keeping to nice A&A is sufficient for current needs

b. its easier to recoup $200K

c. maintain cash liquidity and lower monthly mortgage

d. less reno means less areas and likelihood to run into problems!

Tks, Zirhk

I spoke with 2-3 contractors (recommended by other landed folks) and their estimation is 200K for extensive A&A. I don't think they are quoting low just to get the work as they are quite established and have a fair bit of referrals. It cld be my expectations and their understanding of what I want differs!

I already have all my furnitures and equipment from current place. Mostly quite new so shdnt have to spend too much on furnishings. We are also not into fantastic designer decor, just simple, quality (yeah, I know that's exp) and easy to maintain. Nothing complicated, just bright airy, pleasant with lots of space!

Aiky,

U bot the place at 1.15mill?!? for a landed!? wow.. good buy! may i know which location? me and my hb always wanna to stay in landed.. but with price now, cannot afford..

we will love to be like u, buy good place and rebuilt to the design we like. well.. guess have to wait for 10 yrs later..

Edited October 11, 2007 by mafiawife

[Warrior88 0]

Aiky,

U bot the place at 1.15mill?!? for a landed!? wow.. good buy! may i know which location? me and my hb always wanna to stay in landed.. but with price now, cannot afford..

we will love to be like u, buy good place and rebuilt to the design we like. well.. guess have to wait for 10 yrs later..

Thought your hb rich? Mafia always stash their cash well, never tell you?

Also now you live in sixth Avenue right ? like the fifth Avenue in New York