To move or improve? That is the question! You’ve extended holiday meal tables into the living room, your kitchen and bathrooms have less-than-ideal flow and functionality, and the prospect of adding that second set of bunk beds in the kids’ rooms seems a bit overboard. The list of things you wish you could change grows longer and longer.
While “to move or to improve” seems to be an easy decision for some, the dilemma of relocation versus remodeling is a struggle for a lot of homeowners. In fact, we frequently hear friends voice their original thought, only to make a 180° turn months later.
Many factors go into making this complex decision. Whether you are sold on the direction you want to take or have just started to explore your options, take heed of these helpful points to ponder.
More isn’t always better. Consider how the square footage of your home or one you’re pursuing is being utilized. Moving may be an easy solution for getting more space, but there could be options for correcting inefficient floor plans by enlisting the help of a design/build firm.
If you’re considering renovating or an addition to your home, look into any zoning restrictions that may exist, and understand the final cost of renovations compared to finding a new home. An extended master suite, renovated kitchen or home office may be just the project you need to make your existing space perfect.
Return on Investment (ROI)
Some renovation projects may allow you to enjoy your existing space for the next couple of decades without the complication of buying and selling. However, some may never see a good ROI. To get a good read on your ROI, talk to both your construction company as well as an established real estate agent. Considering both sets of information can help you weigh if an addition or improvement makes sense.
In some cases, adding that extra bedroom and extended living area underneath or remodeling your kitchen may be the perfect choice to stay in place as well as capitalize on a great return years down the road. Adding another 500 square feet of usable space to your existing home may be significantly less expensive than the costs of trading up to a larger home.
Renovations at Your New Home
Don’t be shortsighted. Look carefully at a new home you may be considering and determine likely upgrades or replacements you’ll need in the next 10 years. House to house, you may be looking to win with a new home, but there may be additional projects you’ll miss seeing early on.
The new property may need landscape renovations, new pavement surfaces, HVAC or roof replacements, or other big costs soon. Make sure those items make their way into your equation.
Consider the true cost of moving. It’s more than the packing peanuts, boxes and truck rental. Having two transactions of selling then buying a home comes with real estate commissions, transfer and title fees, paying points on a new mortgage, closing costs, utility hook-up fees and more.
While considering your options, make sure to pay attention to the cost to heat, cool and power the home – whether buying larger or adding space and consequential HVAC upgrades. Size, technology and building materials will greatly impact how much you spend each year.
Your existing home could even have advantages over a new home, with a lower price. Replacing windows and doors, HVAC systems and adding insulation could be a better move than finding a newer home.
While newer homes often have more up-to-date smart technology integrated, it may not mean they are as efficient as a properly upgraded existing dwelling.
Take a look at the taxes you pay now, what the anticipated increase could be with a remodeling project and then weigh that information against where you may be looking to buy. Some desirable neighborhoods may have a much higher annual tax bill, so lump that into your figures as well.
Location, location, location. What do you spend for commuting and driving to town for both work and pleasure? Consider the extra or saved gas, tolls, public transit and wear-and-tear on your vehicles when making a decision. It may add up to more annually than you first imagined.
Interest rates are typically slightly higher for remodeling options than new purchases, but those can be balanced with shorter terms as well. Consider the overall interest you will pay for financing a new home versus a renovation. How much will you be paying in the long run? A lower interest rate and monthly payment doesn’t necessarily mean a better deal.
Intangible Return on Enjoyment (ROE)
The unknown can be a scary thing. Living in your neighborhood may be a blessing or a curse that may be strongly impacting your decision. However, if you enjoy your locale, consider what situation you may be moving into.
You could be finding the ideal new setting, but nearby development could make it change drastically in the years to come. Likewise, bad neighbors make for a bad decision. Although some of these factors are outside of your control, weigh your existing and new options carefully.
The love you have for your existing or new property may be worth paying more one way or another. Don’t discount its value.
Expert Help Leads to a Confident Decision
Find resources that will make you a wise consumer. We’d love to help equip you with the right information to make the decision that’s best for your family and your home. Weigh the renovation cost figures and the factors listed above alongside comparable prices of a home in the new neighborhood you’re considering. That’s exactly what you need to head in the right direction.