Should You Renovate or Should You Move?

Should You Renovate or Should You Move?
  • Opening Intro -

    Taking on a home improvement project makes sense for many homeowners as the work gets done while you’re still living in the home.

    No need to move out, at least temporarily, unless the entire home is being gutted.

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Are there times when a home improvement project should be dismissed and the home sold instead? Yes, but there is much to consider before uprooting to find a home that is more suitable to satisfy your needs. Let’s take a look at the wisdom and practicality of moving versus staying and at least one alternative for each point.

Your home is too small

Adding on to your existing home may be the best way to gain some more room. Raise the roof, finish the basement or garage, or put an extension on to the back of your house. However, the cost of undertaking such a project could be surprisingly high never mind the permits needed, the signed approval from neighbors or your homeowners’ association, and the increased taxes you’ll pay.

Your home is too large

You can’t seal off rooms or lop off the top of your home, but you can sell it if it is much too large for your present needs. With children grown, do you need five bedrooms? Not likely, especially since visits from offspring and their children are limited to once annually and not everyone visits at once.

Countering both points is something obvious to today’s homeowner: the price you might get for you home if placed on the market is likely far lower than what you would have gotten two or three years ago. Selling your home will incur real estate commissions of up to 6 percent and, in some states, you may be hit with a transfer tax.

Estimate the value of your home and subtract commission, taxes and moving expenses. Value the price of your new home and the cost it would take to get you moved in. Consider certain “hassle factors” such as disconnecting and then reconnecting utilities, moving your children to another school district and dealing with a new set of neighbors.

Your schools are not good

Families with school aged children often make a decision where to live based upon the local school district. If the schools are performing poorly, you might relegate your children to substandard education, making it more difficult for them to qualify for a better college. Higher education is essential for most of us — having access to the better schools can insure that your child has at least a fighting chance.

On the other hand, moving to a better district may not mean your children are being better educated. In some districts, schools vary in performance and your children might be redistricted after your move. Instead of moving, you may find it beneficial to place your children in private school or homeschool.

Your investment will pay for itself

One reason to stay in place is if your home renovation project is worth it financially. Some renovations, such as kitchens and baths, can pay for themselves if done right. Certainly, you may not recoup the cost of a $125,000 chef style kitchen upgrade, but a more modest $20,000 facelift could pay dividends. Similarly, expanding a half-bath into a full bath may prove beneficial. A home with two full baths is more desirable than one with 1.5 baths.

Then again, why shouldn’t you put in a family room or extend the living room if all you want is to enjoy your space? Certainly, you can keep in mind resale value, but if you’re seeking to maximize your comfort, then by all means renovate your home. You might have an emotional attachment to your home as well, being that it is the place where you raised your children. Liking your neighbors, easy access to shopping and business, and a stable neighborhood are reasons you might want to stay put.

Ultimately, your decision on whether to stay or go may be depend on purely financial reasons. If your home is paid off, you have much more leverage than if you owe money on your home. Some homeowners may find themselves in for the shock of their lives when they place their homes on the market, owing more on their most expensive asset than what they would fetch in a sale. Performing “due diligence” at this time is essential, and the only certain way to know if you should hold on or move on.

Resources:
CNN Money; To Renovate or Move; Jean Sherman Chatzky; April 12, 2002
Penn Live; Renovate or Move? Both Options Have Advantages, Disadvantages; M. Diane McCormick; Sept. 26, 2009

 

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Categories: Home Renovation

About Author

Matthew C. Keegan

Matt Keegan is a freelance writer and editor as well as publisher of "Auto Trends Magazine", an online publication. Matt covers campus, consumer, business and financial topics on various websites and weblogs, and has been published in the "Houston Chronicle", "Sam's Club Magazine" and "Wisconsin Golfer".