Buying a new home or remodeling the existing one can be a difficult decision to make. It’s certainly a decision Alan Harper from Two in a Half Men would never have to make since he lives rent free with his brother! Moreover, with growing family needs, many people want a more spacious home, but they don’t wish to relocate.
They may have an emotional attachment with their old home, or they could have friendly neighbors they don’t want to give up. Some may simply decide against moving to a new home because they don’t want to leave their yard and the roses behind.
Consider the following factors before you decide to renovate your home or buy a new one.
Do You Really Like Your Home?
This is the most important factor to consider. If you really love your home then you should probably consider the option of renovation.
Extending the home or breaking down a wall between two rooms could give you more space. You could also consider turning the attic into a room. A residential architect might help you upgrade and see potential functional spaces which you had missed earlier.
However, you really need to consider whether your heart is truly in your home. Do you seriously believe you love your neighborhood? Ask yourself how you feel about the location and surrounding area. Almost 70% of homeowners faced with the dilemma of relocation over remodeling end up choosing renovation.
What is Your Financial Status?
Many homeowners find it difficult to keep up with their current mortgage payments, and struggle to manage their monthly budget. If that is the case then relocation is probably a more viable option.
If you are considering remodeling to boost your home value, then you need to factor in the returns on investment. You should make sure that the upfront costs are recovered in this exercise. Statistics show that only about 80% of the renovation costs are ever recovered during a sale.
You also need to be careful not to ‘over-improve’ the home. Your house might not sell for much if the rest of the houses on the block are still waiting for a buyer. You need to stay realistic and not try to over achieve here.
If you are remodeling for yourself and not for re-selling, then you should make sure you know exactly what you want before you start the project. You should have detailed conversations with contractors and architects about the materials, the designs and the costs.
Many homeowners find their budgets overshooting when their plans change in the middle of a renovation and they want different materials or design changes.
Do You Have the Time For Renovation?
Remodeling or renovation takes a long time to complete. Remodeling your kitchen to put in new cabinets, countertops, floor, and appliances can take anywhere between 3 to 6 months. It can be more if you factor in plumbing and wiring.
It can get very difficult to live in a house that is being remodeled. The continuous dull thud and whirring of machines can be more than an inconvenience. You need to have the patience and dedication it takes to remodel a home. It is a long term commitment which once started cannot be left unfinished.
Pros & Cons of Remodeling
Home prices have been rising drastically. You may consider remodeling as a cost effective option that lets you enjoy your yard as well as the neighborhood. Your children get to stay in their schools and you have the same commute time. Here are the various pros and cons of remodeling.
- Your home, your way
Remodeling lets you make your home the way you want it to be. You can factor in the extra cupboard space or cabinet shelves. Your home will be designed as per your specifications.
- Borrow against home equity
Remodeling gives you the option to use a home equity loan or HELOC rather than disturb your current finances. You do not need to dip into your savings to get a new home feel.
- Avoid moving costs
Remodeling essentially helps you save as you avoid the dollars wasted on moving. Packers and movers can be expensive. You can also save on realtor commission.
- Surprise expenses
Renovation can be a large scale project involving tearing down walls, adding gas lines or moving plumbing and so forth. You can run into unexpected issues that might cause your remodeling budget to surge.
- Life gets disrupted
While moving will not take more than a month for you to get accustomed, remodeling can disrupt your life for anywhere between 3 and 9 months. It can be mentally tough to deal with contractors, product selections, and potential delays on top of your regular work load.
Pros & Cons of Buying a New Home
Here are the various pros and cons of buying a new home:
- Change your neighborhood
You can physically move to a new location that can be an upgrade to the place you currently live in. You can also consider a smaller or a bigger house as per your preferences.
- Avoid the construction zone
Remodeling can be nerve wracking with constant noise, mess and stress. You do not have to live in the construction zone. You can easily save money by avoiding living at a hotel or eating out in a restaurant especially if there are invasive projects such as bathroom or kitchen remodel.
- Move to an already renovated home
You can buy a home that has been completely remodeled and redesigned to your specifications. All you need to do is pack up your bags and move in.
- Lack of choices
There might not be many houses of your choice in a desired location. To see what houses are available online there are numerous house hunting websites. Some sites are better than others. Zillow and Trulia are some of the market leaders. Lack of housing stock is one of the biggest reasons why homeowners turn to remodeling.
- Time consuming and Expensive
Relocation can be stressful too. You have endless boxes and stuff that needs to be packed. You could hire movers and packers to make your life easier. However, they can prove to be expensive and you will still have to take care of the small things.
The Bottom Line
Remodeling can be time consuming and costly and still may not end up fulfilling your goals for more space. Buying a new home avoids these limitations.
However, buying a new home might not be an option if you are in like your old home or your neighborhood, or do not have the extra money to cover the extra costs. The only way to decide is to figure out your housing goals. Also, you should consider your lifestyle and finances.