Buying a New Home vs. Remodeling: 3 Questions to Ask Before You Decide
[fa icon="calendar"] March 22, 2019 / by Home Services Expert
You might be at a point in your life where you’re looking around your home wondering if you should spend your precious time and money remodeling or just move altogether. Maybe you feel like your family has outgrown the space. Or maybe the priorities in your life have changed and the space no longer gives you what you want. You may be more investment savvy and the market is causing you to ask what would give you the best return on investment. Whatever is making you question if your current space is where you belong, there are 3 important questions to ask yourself before making the decision.
1. How emotionally invested are you in your current home?
Our homes contain a lot of our memories, so ask yourself if you’d be sad to leave your current house. You might find you have emotions attached to it because it’s the home where your kids grew up, you’ve become good friends with your neighbors, or the location is an ideal location close to a park, your favorite coffee shop, or easy access to get anywhere around town.
On the flip-side, you might not like your location because it’s by a busy street or you aren’t fond of your neighbors. If this is the case, then you may want to move instead of remodel because you don’t have control over the busy street or your neighbors.
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2. How financially invested are you in your current home?
Crunch some numbers to see if it’s more economical to remodel or move. Take into consideration how much you owe on your current mortgage and, if you do remodel, what that actually would entail. For example, let’s say you want a bigger kitchen and open floor plan for entertaining. A $150,000 remodel in a $200,000 home doesn’t make sense, but if you’re just wanting to update the kitchen cabinets and counter tops, then it would be worth it.
Also be sure to check property taxes in your state. In California, the tax rate is set when you buy the house and increases are limited as long as you live there, which means moving to a new home could equal a larger property tax bill.
You will also want to take into account the upfront costs. According to an article from Bankrate.com:
Before opting to remodel or sell, try to determine what return on investment you’ll see on either option. So says Brian Davis, who has bought, renovated, leased, managed and sold many homes and is director of education for Spark Rental.
If upgrading, “What’s the average return on investment for the renovations you’re considering?” he asks.
Most home upgrades do not pay for themselves in the form of a higher eventual sale price. Some renovations manage to recover 80 to 90 percent of their costs, while others barely cover half their expenses.
If you’re thinking of listing your current home and buying another one somewhere else, ask yourself whether you’ll be in the new place long enough to recoup the costs of taking out a new mortgage and moving. Davis says it has traditionally taken seven years to earn back those upfront costs.
3. What can your personality put up with?
Remodeling is no walk in the park. It can be a long process with surprises popping up along the way that demand patience and flexibility. You’ll also be living with the constant sound of power tools, frequent dust flying around, and contractors coming in and out of your home.
On the other hand, if the thought of cleaning and staging your home, putting a for sale sign in the front yard, and dealing with the roller coaster of realtors and price offers stresses you out, remodeling may actually seem like a walk in the park!
Be honest with yourself about what you can and cannot tolerate and live with before making a final decision.
The decision to remodel or move to a new home is ultimately yours to make based on your current circumstances and weighing the pros and cons between where you are and where you want to be.
If you decide to move forward with remodeling, contact Experts in Your Home to learn about our remodeling services – we do more than you think!