There are a lot of factors that go into deciding which house to buy. However, after some time, those needs may have changed or the house you bought is simply not living up to expectations. It could be because your family is growing, there isn’t space for those working remotely or you just aren’t satisfied with the home as it is currently.
In times like these, homeowners have two options: renovating the home to make it a better match or finding a new home that can be all they dreamed of and more. How you make the choice depends on wide range of personal factors. Here’s a look into what should be considered to help you make the best decision regarding moving or remodeling.
First things first, is it the right time to move for you, your career and other family members? Relocating to a new home can be as stressful as it is exciting. When not everyone is on board — whether it’s because of changing schools or a longer commute — it might indicate that it’s not the best time to uproot. It’s essential to respect the whole household’s input, as moving can be a life-changing event.
Another aspect of timing is the state of the real estate market. Knowing when to sell and when not to takes a lot of research, especially with market conditions as volatile as they have been as of late. There are also seasonal trends to keep in mind; spring and summer are typically times of higher demand. With these concerns and others like them, it’s vital to adequately investigate the market before listing your home.
These factors could be pointing instead toward a remodel, but the timing also needs to be right for such construction. Those working from home or studying online could be disrupted by the hustle and bustle of major renovations. The costs should also be kept in mind. Depending on how many and how big the changes are, your costs could range from $30,000- $250,000, and there are many examples of projects that have gone way above that.
Speaking of costs, there are a lot of finance-related elements influencing this kind of decision. Often, the first thing to consider is the mortgage situation. Refinancing to afford a new mortgage or opting for a cashout refinance to pay for renovations could set back the progress you’ve made in paying off the house. It may be more prudent to stay if there’s 15 years or less before taking on a new 30-year mortgage.
There’s also out-of-pocket expenses associated with both options. However, major home improvements can be funded with your saved cash reserves or even with several loan options currently available.
It is well known that remodeling will add value to the home, but that isn’t always the case. Remember to balance the “added value” with “getting what you want”. If your big-picture plan is to make the most of your financial investment ( like a stock or bond), then limit your changes to things that will retain the most value or recapture your investment. If you are like most people, the primary goal is to be comfortable in your home, and if it is worth more when you sell it than you have invested, that is a bonus.
If you’re planning to upsize with a new home, there are added costs such as higher property taxes, increased utility usage and possibly a greater cost of living in a more expensive part of town. Plus, you may have to renovate once everything is settled. There are costs with selling as well. For instance, approximately 15% of a home’s sale price is deducted and used for commissions, closing costs, repairs and so on.
Weighing the Pros and Cons
As you continue to mull over this decision, try laying out a list of pros and cons for both options. Be sure to keep the timing and costs in mind, as well as the emotional attachment you have to the home and the potential implications of moving. Weigh the level of work needed to make the home all you want versus the work it would take to move. Going over all these particulars carefully can help point you in the right direction.
Author bio: Nick Adler is a blogger for Aussie Moving, a top moving company in the Santa Barbara area. He has five years of experience in the industry and focuses on providing resources for people going through the moving process.
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