Are you looking to change your living situation, either by improving upon your home or moving to a new house?
A key characteristic of the American way of life is our desire to continually improve. Whether that means moving into a bigger house, a house in a more desirable location, or customizing our existing house to better suit our needs, we have a collective hunger for improvement and betterment.
Moving vs. Remodeling is an age old question that is very much alive today, now that the economy has somewhat bounced back and homeowners are spending more of their discretionary income on their homes.
Rather than agonize over whether to move or improve, we recommend gathering as much information as possible, considering all of your options, and making an educated decision that puts you and your family in the best possible position.
Six Step Guide to Moving vs. Remodeling
Consider Your Motivations for Change
We believe it’s important to evaluate your core motivations for making a change, before you factor in the financial aspect. Moving or remodeling is a life decision, and most people can gain more clarity when they understand the reasons behind their desire for change. Are you considering moving because…
- You want to live in a more desirable neighborhood?
- You want to shorten your commute?
- You want better access to a downtown area?
- You want a larger or smaller yard?
- Your at-home family is growing or shrinking?
- You want to be closer (or further) from family?
- You want a better interior layout or floor plan?
- Your home is old and just needs too much work?
Your answers to questions like this will be a great starting point. You might find out that, based on your answers, remodeling is really not an option for you. Or you may surprise yourself and have a realization that you can transform your existing home to make it what you really want.
Research and Consult with Experts
You can definitely do a lot of good research online (such as reading this article!), but we also recommend gathering some professional opinions about your specific situation.
Ask a contractor friend to come over and give you some ideas on what you can do with your home. When homeowners ask us for our opinion, we always discuss the Three D’s of the Remodeling Project Budget.
Ask a local real estate agent to give you a basic market analysis so you can get an idea of what your home is worth, what it might be worth after a remodel, and what homes in the area are selling for. Or if you don’t know a real estate agent to ask, you can do your own research on sites like Realtor, Zillow, and Trulia.
There are so many variables in making a decision like this that you want to assume as little as possible. The more information you can gather, the better.
We like to say that there are two categories of costs involved in remodeling or moving – Obvious Costs and Hidden Costs.
The obvious costs may include:
- Cost of remodeling – contractors, architects, materials, etc.
- Cost of purchasing a house
To help homeowners evaluate costs of various remodeling projects, we have compiled a comprehensive Estimated Remodeling Project Investment Costs Guide.
However, there are many additional costs to either moving or improving that are often overlooked by homeowners, but they’re very real:
If you’re selling your house and moving, hidden costs may include:
- Making small repairs to your existing home so it shows nice
- Staging your home
- Real estate commissions
- Moving company
- Improvements to the home you are buying
- Closing costs
- Possible increase (or decrease) in mortgage interest rate
- Possible increase (or decrease) in property taxes
If you’re remodeling, hidden costs may include:
- Interior design
- Possibly staying in a hotel while work is being done
- Eating at restaurants or take-out meals
- Change orders for the remodeling project
This is where your trusted professionals, such as remodeling contractors and real estate agents, can really help. These may be seemingly insignificant “hidden” costs, but they can definitely add up and influence your decision-making process.
Weigh the Intangibles
Of course a major life decision like this should not be solely based on dollars and cents. There are other lifestyle, or intangible, factors that usually go into making a smart decision.
Here are some factors you may want to consider:
- How much are you attached to the memories of your home? After relocating or down-sizing, some empty nesters lament that their new home doesn’t have any memories.
- Do you like the way your home is situated? For example, do you like that your backyard gets great afternoon sun, or do you love that you live on a completely flat street?
- Neighborhood – amount of street traffic, nearby parks, neighbors, neighborhood noise
- School district – this is usually a relatively significant factor for families
- Ease of commute – time is precious. The implications of a potential move on your commute can be a key factor.
These are things that you and your spouse and/or family should spend time thinking about. Sure, there is a lot to consider, but try not to get stressed or overwhelmed. You’re already being smart by doing your research in advance.
Consider Financing Options
After you have considered all potential costs, it’s time to determine how you’re going to pay for your remodel or move. Will the money come out of savings? Will you ask for a loan from a family member? Where are you going to get a mortgage? What financing options are available for remodeling projects?
One popular way to finance a remodel is with a FHA 203k Renovation Loan. There are several qualifying criteria, and these loans aren’t for everyone, but in the right situation, they can be an ideal solution for both the homeowner and the contractor.
We have compiled a guide that shows you what your monthly payment can be for various home remodeling projects with just 20% down. Read about financing remodeling projects here.
However you intend to finance your project or your move, it’s crucial to factor in the cost of financing, so you can compare apples to apples.
It’s also important that you map out a realistic repayment plan, so you can finance your remodel or move responsibly and ensure that you’re not “house poor”.
Make Your Decision Confidently
That’s it – you’ve done all the hard work! If you follow the steps above, you will put yourself in a great position to make a smart decision. The truth is there’s no definite answer that applies to everyone. Each situation is unique, which is why it’s important to evaluate all of these factors.
Once you make your decision, be confident in yourself and don’t look back. You’re going to have a lot of fun either improving your home or moving into a new one.
How Design Build Planners Can Help
We enjoy helping homeowners make the move vs. improve decision. In fact, the first step in our project design process is a lifestyle and design consultation, where we guide you through our proprietary homeowner profile checklist to help you assess your options.
If you are considering either remodeling your home or relocating, we invite you to schedule a complimentary phone consultation and start your decision making process with Design Build Planners.
Further Reading: Houzz published an article called Should You Remodel or Just Move? The article outlines some strong points, but the comments are even more insightful for those wrestling with this decision.