Moving and renovating can bring a much-needed change to your lifestyle
After years of dealing with a cramped kitchen or a tiny primary bathroom, you may be starting to realize that your current home doesn’t have everything you want or need.
If that’s the case, two potential solutions are starting a remodeling project to fix those issues or buying a new home. To help you decide which option is best for you, we’ll break down the factors to consider and the costs of each fix.
Start a Remodeling Project Vs. Move: 6 Factors to Consider
When weighing this important decision, take the following factors into account.
Cost
Cost tends to be a major factor when deciding whether to renovate your home or move. Whether it’s more expensive to do one option or the other will depend on your current mortgage situation, amount of home equity, and how much you have in savings. In general, renovations come with more immediate expenses, while moving and buying a new home includes more long-term costs.
Timing
Timing is everything, so researching the average amount of time it takes to sell a home in your area can help you create a moving timeline. Moving also comes with a change in schools, commutes, and mortgage costs that can impact your lifestyle and your savings goals.
A remodel requires even more patience and flexibility in case unexpected issues or delays occur. Consider the best time to start your remodel project, as seasonality can impact the cost and effects on household members.
Local Housing Market
In addition to personal timing for your family, consider whether it’s a good time to buy or sell a house based on your local housing market. Even if the cost of moving seems like a bargain compared to the renovations you’d want, you should talk to a real estate agent to learn about market conditions, seasonal real estate trends, and steps you’ll need to take to appeal to potential buyers.
Return on Investment (ROI)
Even if you renovate instead of moving, you likely want to sell eventually. You should factor in the potential return on investment (ROI) of a project to help determine what will give you the most bang for your buck. For example, a new entryway or a minor kitchen remodel will likely create more ROI than a new deck. Of course, improvements that make your home more enjoyable to live in may have more value to you.
Emotional Investment
Moving can start to seem less appealing when you consider leaving behind a home and community you love and the memories you’ve created there. Are you and your family ready to leave behind neighbors, schools, and local businesses and start a new chapter in another home? It’s important to consider emotional factors as well as financial factors when weighing this kind of decision.
Motivation for a Change
If you’re considering a remodel because you aren’t satisfied with your home, consider the core reasons for that dissatisfaction. A renovation won’t fix inconsiderate neighbors, unfavorable schools, space limitations, or a home type that doesn’t fit your lifestyle needs. For example, you can’t turn a condo into a single-family home with a backyard and a two-car garage.
Cost of Remodeling Vs. Cost of Moving
When deciding whether to move or renovate your existing home, consider the true cost of each option.
How Much Does It Cost to Remodel Your Home?
A complete home renovation costs $20,000 to $75,000 on average. This estimated total includes building permits, the cost to hire an architect, materials, and labor if contracting the project out. You should also budget an additional 20 percent for potential unforeseen costs. If financing your remodel through loans, you’ll also need to factor in a three to six percent interest rate.
If you’re remodeling to upsize your home, you may also end up paying higher property taxes after changes have been made and higher utility bills.
How Much Does It Cost to Move to a New Home?
If you’re moving from one home to another, you’ll likely have to buy and sell a home at the same time. The cost to sell your current home is a significant expense, with an average of 15 percent of your home’s sale price going toward agent commissions, title insurance, repairs, and curb appeal projects. Costs are higher for older homes that need major repairs before selling.
Other expenses come from buying a new home, which may need remodeling, new furnishings, and appliances to bring it to your standards. Home appraisals and title insurance can cost $500 to $2,000, and closing costs tend to total three to six percent of the mortgage. You’ll also need to pay the cost to hire professional movers, which runs about $1,400.
Finally, you’ll have expenses if you’re upgrading to a larger or more valuable house. These can include higher property taxes, utility usage, and cost of living. A significantly more expensive home can also come with a more expensive mortgage. However, you may be able to offset this cost with a higher upfront payment and get a better rate by negotiating a shorter mortgage term.
Pros and Cons of a Home Remodeling Project
Home remodeling helps you avoid the complications of uprooting your family and entering the real estate market, but it also comes with its own fair share of challenges. Consider the following pros and cons of a home remodeling project to help you decide whether to renovate or move.
Pros of Remodeling
Keep your lifestyle: Your daily commute, local schools, and nearby amenities stay the same.
Customization: You can redesign your home to fit your wants or needs rather than trying to find a new one that checks the same boxes on your wishlist.
Increase your home’s value: The upfront cost of additions can pay off down the line at resale.
Cons of Remodeling
The toll on your mental health: You may be living in a construction zone or a hotel, eating takeout, boarding pets, and sharing a confined space with your family for several weeks or months, depending on the remodel project.
Investment risk: Even if your goal is to increase your home’s value, there’s no guarantee your renovation investment will pay off in the long run.
Unforeseen costs or delays: Remodels don’t always go as planned, so budget money and time for potential issues and be sure to choose a reliable remodeling contractor.
Pros and Cons of the Moving Process
Moving can be difficult, but the pay-off may be worth it if your current home isn’t fulfilling all of your needs. To help you decide between moving and renovating, consider the following advantages and drawbacks of selling your home and moving to a new one.
Pros of Moving
A fresh start: Get the chance to live in a new environment and have new experiences. Plus, you can design your new home to fit your lifestyle.
Right-size your space: A new home is the best way to get extra square footage, especially if you need to accommodate more people.
A new floor plan: Find a floor plan that works for your family’s lifestyle needs instead of trying to adjust a dysfunctional one.
Upgrade your portfolio: If you have equity, selling a home and buying a new one can be an investment. A new home may also be affordable if your current payments are not.
Cons of Moving
Lifestyle changes: You’ll have to give up the things you love about your current home and, if you’re moving out of town, the surrounding area.
Sentimental losses: You may be leaving a home where you made precious memories, which can be a difficult adjustment.
Stressful timing: Moving can be tough to balance with other major life events, and the process of buying and selling at the same time is a stressful process.
