In my last post I talked about “Getting One’s Head in the Game”. Over the last few weeks I have been frantically getting quotes from architects, builders, kitchen suppliers and demolition experts. When one considers the options for remedy to a leaky house there are three main choices;
- Sell the property for land value + any residual building value
- Repair the existing property
- Demolish completely and rebuild
In considering each option, one must consider the unique costs involved with each. For example – in the quote I got to repair the house there was a charge of $56,000 for demolition. This cost covers the individual extraction of each support post or stud and the propping up of the framework whilst a replacement is added. This piecemeal approach is very costly. To demolish the whole house to the ground – after a day recovering any items one can use in the rebuild – is only $17,000.
A repair to a leaky house can never be nailed down until the work is in progress – so one has to be prepared to have an open checkbook. The local authorities also require extensive expert appraisal and documentation of the project, adding considerable inspection and project management fees. I would add an additional $10,000 for experts and another $20,000 on top of normal project management.
Also be prepared that to get a Code of Compliance Certificate the Council will be all over your house and expect you to add or change anything they feel currently doesn’t meet the new code. Expect no sympathy that they caused the problem – you won’t get it.
In comparison, demolition of the entire house provides the opportunity to have a more concise quote plus the ability to tweak the existing design. You know exactly where you are and the finished home is totally free of the stigma of leaky homes. The downside is that you lose any existing usage rights – so expect a lengthy resource consent process if you home currently infringes height to boundary or parking.
Selling down is a viable option for many home owners. Any property investor knows that the capital increase in a property is always in the land value – not the building value which decreases by at least 5% every year.
In times of low building volumes, many builders are willing to take on leaky home projects to keep their teams employed – so seek out individual builders with a proposal. They get to make the profit on the labour – or at the very least get the opportunity to upgrade their own living environment at a much lower cost.
So weigh up all the options – get quotes and use the powers of Excel to build an Analysis Decision Model to help you make that all important decision.