Relocate or renovate your home

Is your current home no longer meeting your needs?

If you find yourself in this situation, you might be faced with a tough decision: should you relocate to a new home or renovate your current one? This choice can be challenging, and there are several important factors to take into account, such as potential expenses, long-term financial consequences, and overall quality of life.

Undertaking a major renovation project can be a significant commitment. It involves tasks like hiring contractors, choosing materials, and managing a budget, which can consume a great deal of your time and energy. Additionally, living through the construction process or temporarily moving to another residence can be quite a hassle.

On the other hand, moving to a new home is notorious for being stressful. In fact, a recent survey revealed that 40% of respondents considered buying a new home to be "the most stressful event in modern life."1

In the current market environment of very low available housing inventory and higher mortgage rates, these uncontrollable factors can contribute to the decision-making process.

Given these factors, which option is the best fit for you? Let's explore some key considerations to help you make an informed decision.

What Are Your Motivations for Making a Change?

When considering whether to renovate your current home or relocate, it's essential to identify your motivations for making a change. While some aspects of your current home can be improved through renovation, others may necessitate a move to a new location.

Renovate

Certain issues, such as outdated kitchens and bathrooms, can be easily resolved with a remodel, leading to a remarkable transformation. A minor renovation can significantly enhance your overall enjoyment of your home.

There may be other challenges that are more complex to address but are worth exploring to explore your options. For instance, if your home feels cramped or lacks certain rooms, you can consider modifications like adding an extra bathroom, creating a dedicated office space, or renovating an attic or basement. You might even explore the possibility of building an accessory dwelling unit or an extension to accommodate a multi-generational family.

Since the start of the pandemic, many Americans have undertaken remodeling projects to adapt to their changing needs. According to the National Association of the Remodeling Industry, remodeling demand increased for 90% of their members in 2020, with 60% reporting larger-scale projects.2

However, the feasibility and cost of these more extensive changes depend on factors such as zoning, permits, and your home's current layout. Seeking guidance from an architect or contractor will help you make an informed decision. We can connect you with our trusted partners to ensure you receive the best possible service.

Relocate

In certain situations, rebuilding your home may not resolve the underlying issues. For instance, if you've changed jobs and now face a long commute, or if you need to live closer to an aging family member, relocating might be the only viable solution.

Conversely, if the shift to remote work has provided more flexibility in terms of location, you might want to seize the opportunity to move to a new area. A study conducted in 2022 revealed that nearly five million Americans had already relocated due to increased remote work options during the COVID-19 pandemic, and an additional 19 million were planning to move in the near future for the same reasons.3

Even if you are satisfied with your current location, moving may still be the best choice. It could be beneficial if you desire a larger backyard or significantly more living space. Similarly, certain frustrations like residing on a busy street or being far from essential amenities cannot be resolved through renovation alone. We possess expertise in this area and can assist you in determining whether another neighborhood would better suit you and your family's needs.

Which Option Makes the Most Financial Sense?

When considering the choice between renovating your current home or relocating to a new one, it's crucial to assess the financial aspects of each option before deciding.

Renovate

Renovation costs can vary significantly, so it's essential to obtain multiple estimates from contractors upfront to gain a clear understanding of the investment required to achieve your dream home.

Consider all potential expenses, including materials, permits, and updates to electrical and plumbing systems. It's also advisable to allocate an additional 10-20% of your budget to account for unexpected issues that may arise during the renovation process.4 If you plan on undertaking some or all the renovation work yourself, consider the value of your time as well.

Hidden expenses can accompany renovations, such as the need for additional home insurance, short-term rentals or hotel stays during the renovation period, storage units for temporarily storing possessions, and extra costs for dining out or laundry services if you can't access home appliances. It's also important to note that certain remodeling choices can have a significant impact on the long-term value of your home. Some projects may increase your home's value enough to outweigh the investment, while others could potentially decrease your home's resale potential.

For example, while you might enjoy the added living space, converting a garage is generally not appealing to buyers.5 On the other hand, refinishing hardwood floors can provide an average return of 147% at resale.2 The specific impact of a renovation will depend on various factors, including the quality of work, choice of materials, and buyer preferences in your area. We can assist you in evaluating how a planned project is likely to affect your home's value.

Relocate

The cost of a new home will naturally vary based on the desired features. However, you may find that purchasing a home with all the desired elements is more cost-effective than making extensive changes to your current property.

For instance, adding a downstairs bedroom suite or opening up a closed floor plan might cost more than buying a home that already incorporates those features. On the other hand, simpler changes and updates might not justify the expense of relocation.

If you're considering a move, consulting with a real estate agent early in the process is advisable. We can evaluate your current home's value and estimate the price range for a new home that meets your needs. This will assist you in setting a suitable budget and managing your expectations.

Remember that the cost of buying a new home goes beyond the purchase price. You should also account for additional expenses like closing and moving costs, as well as fees associated with selling your current home. Additionally, comparing current mortgage rates to your existing one is important to understand how a different rate could impact your monthly payments.

It's worth noting that mortgage interest rates are typically lower than rates on other types of loans,6 which means you might end up paying less interest on a new home purchase than you would on a remodel. If you require assistance exploring your financing options, we can refer you to a lending professional who can guide you through the process.

Which Option Will Be the Least Disruptive to Your Life?

A final – AND critical - factor to consider is the significant time and effort involved in both renovating and relocating.

Renovate

It's important to acknowledge the substantial time and effort required for a large-scale renovation, even if you opt for a general contractor. You'll still need to make numerous decisions and considerations. For instance, even a basic kitchen remodel entails choosing from a vast array of cabinets, tiles, countertops, paint colors, fixtures, hardware, and appliances.

It's also important to note that staying in your current home during renovations does not exempt you from packing and unpacking. Most renovation projects, including kitchen, bathroom, and flooring replacements, necessitate removing your belongings during construction.

The time frame for a renovation is another crucial aspect to ponder. Due to high demand for contractors and ongoing material shortages, there may be a significant waiting period before the project can commence. Furthermore, once the work is underway, it can take several weeks to months to complete.7

Consider whether you can comfortably live in your home while renovations are ongoing and how it might affect your daily routine. For example, enduring several months without a functional kitchen can be frustrating, inconvenient, and costly since you may need to rely on prepared food. It's crucial to remember that construction delays are common, so contemplate the potential additional challenges they might pose.

Relocate

Finding a new home and selling your current one also demands a substantial amount of time and energy. According to the National Association of Realtors’ 2022 Profile of Home Buyers and Sellers, the average buyer spent around 10 weeks searching and toured approximately five homes.8

However, in many cases, the timeline for relocating can be shorter than that of a major renovation. Once you find a suitable home, it typically takes between 30 and 60 days to complete the closing process if you're obtaining a mortgage. If you're purchasing with cash, the process can be even quicker. Moreover, you have the advantage of searching for your dream home without the inconvenience of living in a construction zone.9

Nevertheless, moving comes with its own stress and disruptions. If you're selling your current home, you'll need to prepare it for the market and ensure it's readily available for showings. Once you've found a new place, the process of packing, moving, and settling into a different neighborhood requires time and effort.

Fortunately, if you choose to pursue the relocation route, we can provide assistance to make the moving process as seamless as possible. We can help you find a property that perfectly matches your needs, sell your current home for the best price, and even refer you to excellent moving companies that can handle the packing and transportation of your belongings.

WHATEVER YOU DECIDE, WE CAN HELP

Deciding between renovation and relocation can be overwhelming, but it also presents a valuable opportunity to enhance your quality of life.

There are various factors to consider, such as how renovations may impact your home's future resale value and the current market dynamics in your neighborhood. We're here to assist you in evaluating your options. Contact us for a free consultation!

The above references an opinion and is for informational purposes only. It is not intended to be financial, legal, or tax advice. Consult the appropriate professionals for advice regarding your individual needs.

1. HousingWire –

https://www.housingwire.com/articles/46384-americans-say-buying-a-home-is-most-stressful-event-in-modern-life/

2. National Association of the Remodeling Industry –

https://cdn.nar.realtor//sites/default/files/documents/2022-remodeling-impact-report-04-19-2022.pdf?_gl=1*3pfs0m*_gcl_au*NTU2MDQ0MzAyLjE2ODMyMzgzMTY