Should you move or remodel?
By Dan Fritschen, Networx
Have you outgrown your home and thinking about adding a bedroom or a family room? Is the kitchen too small or just worn out? Are the bathrooms in need of a facelift? Everyone has had to face the challenge of deciding to live with their home as it is, remodel it, or pack up and move, and it is a difficult decision.
The number of variables you must consider to make a good decision are almost limitless. The situation isn't impossible though; with a bit of research and analysis you can wade through your options and make the right "Remodel Or Move" decision.
The many reasons to move and many reasons to remodel can be divided into two big categories -- the financial and the emotional. Along with considering your reasons to do anything you should also clearly understand your goal. Is your goal to live in your dream home regardless of cost? Maybe your goal is to just be comfortable in your home at a reasonable cost? Or are you planning to remodel your home for a profit?
Examples of financial reasons to move and to remodel:
• Property taxes: Property taxes can vary considerably from home to home if you move. And unlike other costs, property taxes need to paid over and over again.
• The cost of selling your house: Costs to prepare your home to sell can be as much as 5 or 10% of your home's value.
• Cost to move into your new home: The cost of moving itself plus any modifications you need to make to your new home.
• Cost to remodel can vary a lot: Make sure you are using a good estimate when making your decision. Plus your home may increase in value when you remodel, so make sure you deduct that from the cost to remodel plus add any increase in property tax that may occur.
Examples of emotional reasons to move and to remodel:
• What you like and don’t like about your current home versus what you can move to: If you love your yard and your neighborhood those are hard and maybe impossible to replace. But if you aren’t that attached to either, and your commute to work is too long, that weighs heavily in favor of moving.
• How about the schools near your current home? Do they meet your needs? Does it matter to you?
• Do you like to remodel? Some people love remodeling, and some people hate it. Regardless of how you feel about remodeling, it is a lot of work, even if you avoid DIY projects and hire a remodeling contractor. And that is true for finding a new house and moving. Neither task is easy, so don’t underestimate the time and effort involved.
Understanding how to categorize your different motivations, and having a clear goal in mind, will help you to make the decision to remodel or to move. If you have analyzed all the costs and know the cost of each choice, then look at the emotional items and see how important each is to you. Is the lower cost option also the way you lean emotionally? How about your goal? If it is to live in your dream home, regardless of cost then the entire conversations about costs may be unnecessary. If your goal is to remodel then sell to make a profit, the neighborhood and schools may not be of any importance.
To remodel or to move it is a big decision, but with a bit of research careful consideration it is likely you can find the best answer for yourself.
Dan Fritschen wrote this article for Networx.com. He is a real estate and remodeling expert in San Francisco. His book is "Remodel or Move?".