Whether to move or remodel is an entirely personal choice, based on your financial situation and your personal preferences. Ask yourself first if you can renovate your house, then look at the costs involved in each decision and whether it will pay off in your situation.
Do you have the space to expand your home? In some areas, zoning restrictions may also factor into the decision. Look at your interior and assess whether you have walls that can be moved and if renovating the interior is really possible or practical.
How sound is the house? Does it have good wiring and plumbing, and is the foundation in good condition? In many instances remodeling or home expansion requires building code inspection. If these things aren’t already up to code, they will have to pass inspection. If your home has major issues, moving may prove more financially savvy than fixing it up.
Try to anticipate the future. Do you plan to upgrade again in the next five years or so? Or will you want to begin downsizing instead? Maybe you will want to retire in a few years, or make a lifestyle change. If you plan to stay in your home for more than five years, the money you spend on remodeling could be a sensible long-term investment.
How much equity do you have in your home? Can you secure financing to remodel or purchase a new home? How is the real estate market in your area at this time? What about the interest rates? A real estate professional can help you answer these questions.
Find out what the proper listing price would be if you were to sell your house. Next, obtain an estimate of how much it would cost to remodel your house according to your remodeling plans. Add this price to the probable list price of your house. If this total is more than 10 percent above the average home value in your neighborhood, you are “over-improving” and may end up with a white elephant on your hands. It’s difficult to sell the most expensive home on a block! Better to limit your renovations, then, or simply move.
Quality of Life
No matter which choice you make, it’s going to involve time and effort. Think about the work involved in each. If you move, you have to look for another home (or have it built), prepare your home for the market, and deal with showings and negotiations on top of packing, moving, and unpacking.
Remodeling has its drawbacks as well. You have to plan the project. Then there’s shopping for supplies if you plan to DIY, or hiring a contractor, receiving quotes or estimates, overseeing the work, and more. Not to mention the time and inconvenience involved with a house under internal construction.
Looking closely at personal, practical and financial implications will help you make a rational choice. The result: a home you will want to live with.