Whether you're building, buying or restoring a home, you will get grey hair unless you find out exactly what you're letting yourself in for from construction and financial points of view.

Spending on building, buying or renovating a home can be one of your best investments, provided you don't over-capitalise on your property.

Property experts say that, as with all investments, research and timing are crucial in getting value for money.

FNB property analyst John Loos says there is no right or wrong answer to the question: build, buy or renovate? The most important factor is why you want to do so.

Most people who renovate are happy where they live, but need more space or want to improve their property and its value. But renovating is not always the more economical option for more space. It could be more expensive than building a new home or selling your home and buying a bigger one.

That decision is not easy. The freedom to decide exactly how big your house will be, what shape it will take and which finishes to use are not only a luxury but also experiences that most people will probably want to have once only.

Most of us lack building knowledge and won't know how sound the house will be until well after the builders have left. We will go over our budget, particularly if we haven' t chosen our builder well.

"So you need to ask yourself: is the present a good time to renovate or build?" says Loos.

"I would say this is probably a less wonderful time to build than, say, the end of 2007. Why? Because through 2008 we saw a sharp increase in building costs.

"This widened the gap between the average existing house price and the average cost of building a house, to the point where building costs are now estimated at 20% higher than the average existing house price," said Loos.

In addition, there are still many distressed sellers. This means that buyers can still find plenty of bargains in established neighbourhoods.

Not surprisingly, building activity is weak. Developers and contractors are finding it hard to bring competitively priced new units to the market.

"This may be the case for the rest of 2010, at least until the oversupplies of existing properties decrease and existing house prices increase considerably.

"Provided that house-price inflation continues, 2011 may be a better time to build. We're not saying that one shouldn't build now, but for the time being, the existing home market still offers some good bargains, although there are fewer as the market continues to recover," said Loos.