Homeowners who are faced with an aging home or one they have outgrown are faced with a difficult decision: should they remodel or move? This is both a financial and emotional decision and there are many factors that homeowners should consider.
Making this decision purely on financial grounds can be a mistake. Consider the many benefits of your current location, the potential long-term benefits of remodeling your home, the disruption and stress that comes with selling one home and buying another, as well as the hassle and expense of moving.
Remodeling or moving – which is a better value?
When many homeowners begin considering an extensive remodeling project, they’re often looking at it as a way to make a major improvement in their lifestyle. This brings up the question of what’s a better return-on-investment. Is it better to invest in a significant remodeling project or simply buy an entirely new home?
Which becomes the better choice is entirely dependent upon your specific situation. Is the value of the remodeled home and the years of added life remodeling gives it, plus the value of your current location less than, equal to, or greater than the value of a new home (minus any renovation or remodeling expense incurred to make it acceptable) and the years you plan to live there, plus the quality of the new location? It’s important to factor in how long you plan to live in either location because that spreads the expense out over time and can eventually turn a liability into an asset. Your choice should be heavily influenced by your priorities. Is resale value your focus because you don’t plan on living there too long, or is it improved quality of life because you’re going to stay for a long time?
Reasons to stay in your current home and remodel
There is an old saying “better the devil you know than the devil you don’t” and that holds true for buying or remodeling a home. If you like your neighborhood and your community is attractive and affordable, then you have a highly compelling reason to stay right where you are and upgrade your current home. After all, you won’t really know how nice your new location is until you’ve already made the commitment to buy there and move.
In many regions, the available home inventory is limited and these days often over-priced. Your ideal home may not be available or within financial reach. Then there’s always some deferred maintenance that has to be dealt with, never mind the expense of remodeling or renovating the new home to bring it up to your standards or just to make it acceptable.
And we haven’t even talked about the stress, disruption, and turmoil that moving to a new location can cause. There’s new neighbors, new schools, new stores and all the changes you and your family will have to make.
Still, there could be some compelling reason to move, other than for work or family. The best way to focus your decision-making process is to do a simple rating exercise. On a scale of 1 to 10 – 10 being “I love my current location, just about everything I need is right here, it’s great” and 1 being “I hate this place, I wish we never moved here” — where would you fall?
If you score between 7 and 10, chances are you’ll want to stay. If all of the current location elements are perfect but the home has some — or even many — issues that need to be resolved, then renovating or remodeling is the best option. The major benefit of staying right where you are is that you already know what doesn’t work and what needs to be changed.
It’s also important to remember that if you’ve been in your current home for any length of time you could have a significant amount of equity built up that can be used to finance a remodeling project. This can give you the freedom to make the changes that will provide even more value and future-proof your home for years to come; for example, improve or add more space to accommodate a growing family, or prepare your home for your retirement and the physical limitations that aging might bring.
Reasons to relocate
While there are a number of strong arguments that can be made for remodeling your current home, there are also good reasons for relocating. Perhaps your local building codes or zoning restrictions prevent the remodeling that needs to be done.
In some cases, the work required to meet your current and future needs is simply too great to make financial sense. Perhaps the home you’re in was originally meant to be a temporary steppingstone in anticipation of moving relatively quickly to something more appropriate or desirable. For whatever reason, that didn’t work out and you ended up staying much longer than you wanted. As a result, the gap between what the home started out to be and what it now needs to be is too great to make the needed investment. Or perhaps the neighborhood has gone downhill, diminishing the value of your home, and it no longer makes sense to keep putting money into it.
How to make your home perfect if you plan to stay
If your carefully considered decision is to stay in your current home, the first thing to do is make a priority list of what needs to be done. This will help ensure that your remodeling project is focused, timely, appropriate, and cost-efficient.
If you’re only planning to stay a couple of years longer, your focus should be on improving curb appeal and making minor updates to boost the resale value and make your home more appealing to a current buyer. If that turns out to be a modest project and you have the resources to do more, then focus on things that will add to your enjoyment of your home and your quality of life.
Planning to stay longer? Then consider renovations that will improve your living space for some time to come, anticipating changes in lifestyle or physical abilities that may require modifications to your space and how it functions. The focus changes to emphasizing your quality of life and how you will utilize your space as your needs evolve, with less emphasis on resale value.
Here are some tips to consider if you plan to remodel your current home:
Improve functionality: There are half a dozen fundamental home renovation projects that have gained popularity as homeowners and their families look to improve their living space to fit their changing needs.
Choose the right remodeling team: Your dream team should provide seamless integration of all the elements that make up a renovation project: design, engineering, and construction.
Pick improvements with the biggest impact: Choose projects that will significantly improve your quality of life and make your home more efficient and enjoyable for you and your family.
Remodeled kitchens are a great value:Many kitchens are poorly designed, with inefficient and too little storage, disruptive traffic flows, awkwardly-placed appliances, and a host of other issues that make remodeled kitchens optimal for improving quality of living and resale value.
If you decide to leave, what should you do?
If you’ve lived in your current home for a long time, or in an older home for a shorter period, it’s a good idea to do some remodeling or renovation. You don’t have to spend a lot to boost your home’s value and appeal so you can sell quicker and get more money for it.
Take a close look at your home and make a short list of things that most buyers would want done, then do them in a traditional, not trendy, way to appeal to the largest number of buyers.
Reach out to design/build firms because they can help you determine what is marketable and how to remodel in a cost-efficient way that maximizes value and your home’s appeal to a broader market.
Should you stay or should you go? The best decision is an informed one, so carefully consider all the factors presented here, especially whether your move is short- or long-term. Then you can rest easy, knowing that the investment you’ll make in your choice is a good one.