No home is perfect, and while yours may have been just what you wanted when you bought it, your needs may have changed over the years. You may now be trying to decide whether to remodel your existing home or look for a new home. Each option has pros and cons to consider, so ask yourself these questions before you decide whether to renovate or relocate.
1. Is it more cost-effective to renovate or relocate?
It will cost money either way, but depending on your situation, one option will be more cost-effective than the other. When you sell your home, you’ll hopefully make a profit, but don’t forget to take all of the hidden selling fees into consideration.
If you’re using a real estate agent, you’ll need to cover their commission. You also may need to complete essential repairs on your home before the sale goes through, which can increase the cost. Also, if you’re moving into a larger house, your utilities, mortgage, and other expenses will increase.
As with moving costs, it can be tough to know exactly what you’ll spend on a renovation. Before you move forward with the project, request an estimate from 2-3 different contractors. Make sure that each includes the cost of permits, materials, architectural plans, labor, and any other additional costs. A home renovation is rarely complete without a few hiccups, so it’s best to also factor in funds to cover surprise costs.
2. What is the real estate market like?
Another important question to ask yourself when deciding whether to renovate or relocate is how well the real estate market is doing. If you live in a seller’s market where houses move quickly, it might be best to take advantage of the demand in your area. You may be able to sell your home at a higher list price for a significant profit.
You can assess the value of your home by talking to a local real estate agent. They’ll review the comps of other homes in your area and determine your home’s marketability. They can also give you a price point they think your home will sell for and an idea of what you might spend on a new home in your preferred neighborhood. All of this information will help you determine how far your money will go if you choose to sell.
3. What’s your timeline to renovate or relocate?
Once you receive an offer on your home, the process for completing the sale can go pretty quickly; however, if you’re not receiving any offers on your home, you may need to go back to the drawing board. This process can take some time.
Remodeling, on the other hand, will require you to be flexible. Renovation timelines are often extended due to unforeseen issues, changes, or delays. You’ll also have to accept living in a construction zone for weeks or months on end.
4. Renovate or Relocate: What’s your emotional attachment to your home?
If you’ve been in your home for a while, you may have an emotional attachment to your home and the community. Things like a good school district, friendly neighbors, a short commute to work, nearby restaurants and activities, and proximity to family are all things to consider if you already have them at your current home.
5. How will the renovation transform your home?
While a renovation can solve some of your home’s problems, it might not solve all of them. Consider what you dislike most about your current home and whether or not a renovation will fix those things. If you’re not a fan of things like the school district, your neighbors, the square footage, or the type of home, these cannot be fixed with a remodel.
6. Will the remodel provide a good return on your investment?
You’re renovating your home to make it more functional for you, but it’s also important to consider whether what you’re doing will provide a good return on your investment.
If you’re not going to recoup a good portion of your investment when you do sell your home, it might not be worth moving forward with the renovation. If you plan on staying in your newly renovated home for years to come, the return on your investment might not be a big deal.
7. Will your improvements add too much value?
Another thing to consider when deciding whether to renovate or relocate is how much of a renovation you’re planning to complete. Are you looking to make extravagant or luxurious updates to your home in a neighborhood full of middle-class families?
If so, you may have trouble selling your home at the price it’s worth and recouping your investment. If you want a higher-end home, it might make more sense to move to a neighborhood with properties that already have those top of the line features.
Deciding whether to renovate or relocate can be challenging. There are pros and cons for each, but ultimately, the best choice for you depends on your unique situation. Be sure to consult with professional real estate agents and contractors so that you know the ins and outs of renovating or buying a new home before you make your final decision.