Many times when children grow up, the house which was comfortable earlier for a small family may seem to shrink in space. You may need to allocate separate bedrooms to children, and the house just doesn't offer that liberty. The only option left with you is to either remodel the house or relocate. While the former is a relatively cheaper option, it may take up too much time and cause inconvenience. On the other hand, moving to a different location may be costlier and will not leave much option for customization. Remember that there is no one-size-fits-all solution to the problem of remodeling or relocating. You will have to compare both the options for different parameters, like requirement, cost, convenience, etc., to get the exact answer. For further help and insight, read the following points.
Make a cost comparison. Understand if you can afford a mortgage loan or a home equity loan. Know the money you will have to put into remodeling. If you find moving out will be cheaper, go ahead and do that instead of spending a huge chunk of your savings on redoing the house. Many times, remodeling will be cost-effective.
Financing a remodeling project is not as easy as buying a new house. You will have to avail a homeowner or bank loan. It will allow you to take a second mortgage on the property. You may require a higher credit score for this. You may even get an increased rate of interest and shorter term of payment.
Added Remodeling Expenditure
Apart from considering the cost, there are several other expenses that will also need to be factored in. You will have to store your belongings in a storage, move furniture, be put up at a hotel, or get alternate living quarters and thrive on takeout meals. All this will definitely add up to your cost of renovation.
Some people like the community they live in, and enjoy the company of their neighbors. This happens mostly when people are staying in the same locality for a long period of time. You tend to have a strong bond with the people in the community and the security it offers. If you do not feel like leaving your 'comfort zone' and moving to another place, you can opt for remodeling your house instead of relocating.
Even if you buy a new home, unless you do some kind of remodeling, it will not fit in your idea of a dream home. Hence, instead of incurring so much cost, you can customize your existing home by making the necessary changes as per your requirements.
You may not like a few features in your current home like proximity to the main road, away from the urban area, too far from your workplace, traffic, pollution, etc. Such things often affect the quality of one's living. So, one can think about moving to a quieter and pollution-free place. At such times, there is no point in remodeling the place as it will rarely help solve your problems.
Suppose your family has just expanded and you need an extra bedroom for your baby. Owing to this, you decide to move out and go to another place. However, you will have to settle for a place that will give you an extra bedroom, but may compromise on other aspects like a patio, sun deck, space, etc. At such times, remodeling your existing space is much better than moving out.
You may be living in an area where security in the neighborhood might be a prime concern. At such times, you will have no option but to move out. No amount of security measures like a burglar alarm will make you feel safe. Moving out will be the only option. However, ensure that you study the crime rate in the area where you plan to move.
Many times, while buying a new house, we only consider the purchasing amount to be the expense. We conveniently forget the sales commission, real estate fees, appraisal expenses, taxes, legal costs, interest on loan, rent for storage, moving costs, interior decoration, insurance, etc. This can really multiply your total cost. Hence, after considering all the points if the new house is blowing up your budget, there is no point in buying a new one.
If you buy a secondhand house, sometimes, it comes with an added cost. Not only does it require repairs and refurbishment, but also some serious overhauling work which will increase your cost. If the house is by the sea, you will have to get a lot of items replaced as they usually detonate due to the salty air. All this will cost you a bomb; instead if you can make some changes to your existing place, it will be cost-effective.
For all the days that remodeling goes on in your house, you will have to bear the brunt of extreme inconvenience. It may take months for the remodeling to get over, which will mean that you will have a difficult time throughout that period. Especially if you have a pregnant woman, baby, or elderly people in your family, it will maximize their troubles. Hence, if moving into a new house with all the required amenities is easier, go for it.
So, you live in a house that has been a witness to history since the early 20th century and has been passed down to you through your ancestors. While you have sentimental attachment with it, you still long for more comfortable interiors. Selling the house will not be a solution. Go ahead and renovate; expand it to suit your needs, but don't sell or remodel it completely.
If it is a particularly old house, it may not be fit for a full-length remodeling effort. Sometimes, the very foundation of the house may not be in a good condition, and renovating will not help. It is advisable that you get a professional to study the house before you take a decision.
Buying and selling a new house has certain tax benefits. You will need to consult a tax expert to know about them, along with the favorable conditions. You may even get a tax credit if you buy the property at a certain period of time. Under some conditions, a married couple may also be allowed to exclude a certain amount from the sale of property. Hence, buying a new house will prove to be more beneficial.
It is very important that you get good contractors for your work. Get a proper estimate for everything before they resume work. Otherwise, your work will be extended for months at a stretch, and the cost will keep increasing. Unless you're absolutely sure that you have the right contractor for the job, renovating your house can be a risky affair.
By opting for remodeling, you will definitely be able to do away with buyer's remorse. There is an online 'remodel or move calculator' offered by remodelormove.com which will help decide whether to move or redo your house. Before remodeling, ensure that you will get your investment back. If the prices are not going to rise in your neighborhood, there is no point in investing in it.