The house that you bought three, five, or even ten years or more ago was the perfect home for your needs at that time. Fast forward to today and the way that you live has changed, so much so that your current living arrangement is cramped or out of date.
Should you sell your home or should you opt for a renovation? Not an easy question to answer, but one that can be answered by asking yourself several lead up questions. There aren’t any right answers, but the way that you answer each question and the weight that you give to each will. Let’s take a look at several questions you may want to ask yourself:
What are the property values in your neighborhood? Are they going up, down, or are they staying flat? If you’re in a market where prices are falling, selling now could mean that you might lose some money unless the home that you are considering buying has also dropped in price. Pay close attention to real estate agent comps!
Where is the new home located? The further the new home is away from your current residence, the greater your expenses of moving will be, never mind the hassles related to making any move. If you’re staying in the neighborhood, your costs will be limited mostly to moving charges and closing costs, but if you leave your zip code your moving costs will increase, your kids may need to switch schools, your car and homeowners insurance rates could change, etc.
Would your home benefit from a renovation, particularly an expansion? If you need an extra room and a bath, your newer home won’t be much larger than the home you previously had. However, if you’re considering an entire addition that will add 50% more living space to your home, how will your newly renovated home compare with homes in the neighborhood? Homes that dwarf the size of houses on the same street rarely return their full investment.
Will your needs be met regardless of the choice made? Will renovating your current home or moving to a new one resolve your living space needs for the long term? If you’re simply looking at getting an extra room for your teenager, renovating attic space may be the most cost effective renovation chosen. If you’re family is still growing, a new home could be the better choice.
Of course, other factors should be considered when making any change:
- Is your job stable?
- Will you need to make another change within the next few years?
- Do you like your current neighborhood?
- Can you do some of the remodeling yourself?
- If you choose to move, will you rent a truck and move everything yourself?
Finally, map out the amount of living space you will need over the next five years and compare renovating your current home to buying a larger home. Whether you choose to renovate or sell, having all of the information in front of you is the best way to make a sound decision.
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