Remodeling and moving are both big decisions, and finances can make it difficult to weigh your options. Maybe your home no longer suits your family’s needs, or it’s getting old. Renovations could solve the problem, but is it more money than it’s worth?
If you feel caught between a rock and a hard place, we’ve come up with a few tips to help you make the best decision for you and your family.
What are your home improvement goals?
Start by jotting down a list of projects you’re wanting to work on. Roughly, how much will each of those projects cost? How long will it take to do them, and will they impact other areas of the house in the process? To provide some more clarity, make a list of upgrades you’d be willing to pay for, regardless if it’s in your current home or a new home. For example, say you’re looking to expand your family in the next few years, and anticipate having two children. Would it make more sense to expand on your current home, or would a larger home be more worth your investment?
What is the local market like?
There are a few ways you can look into this. The first is to compare your home’s value with recent sales in your neighborhood. If homes nearby are worth more than your house, remodeling could increase the value of your property so it aligns with the overall value. On the other hand, if you’re already in the top tier of your neighborhood value, remodeling probably won’t result in the quickest ROI. If you plan on being in the house for another few years, it could. But if you’re planning to move and get these remodeling projects done relatively quickly, it’s probably not worth your time. Another thing to take into consideration are any local community restrictions on renovations. Some HOA communities have strict guidelines on what types of renovations can be done, so make sure you reach out to ensure you’re not overstepping any guidelines. If the guidelines restrict you from the renovations you want, you might have your answer.
What would the costs be to sell your home?
Selling your home means less renovations, but there other costs that need to be factored in. For example, real estate agents usually charge a commission of 6% of the price. Not to mention any travel costs, moving expenses, and the down payment. These nuance costs can add up quickly, and could ultimately result in a higher amount than just sticking to renovations.
What suits you emotionally?
At the end of the day, you want to feel good about whatever decision you make. And selling vs. remodeling may impact people differently based on other areas of their life. For example, a surgeon who works 70 hour weeks and lives alone might not have the time to dedicate to home renovations. But a family of three with a stay at home parent might be a more feasible situation for renovations. Make sure you take into account how your decision will impact your day to day and overall stress levels.
Ken Venick is your one stop shop to handle all your mortgage needs. Whether you’re looking to home renovate, or interested in moving and purchasing a new home, we can help. Visit our services page for more info, and contact us today!