With every house, there are times when you have to decide whether to stay and invest in the changes you need to update your home, or to simply sell it and move on.
That answer is: it depends.
There are lots of scenarios where you might want to upgrade your home. Maybe you need space for the kids. Maybe you need to update a kitchen or bathroom. Maybe your aging parents want to move in. Maybe you just want to do those things you’d been putting off all those years.
To determine whether it’s better to build on or move on, you’ll need to consider these key questions:
- How emotionally attached are you to the house?
- If you decide to stay, will the renovation generate a good return on your investment?
- If you decide to leave, can you afford to buy a replacement home?
It’s a very personal decision. “I think that we should make the best of where we live and we all should be able to come back home to a place that is welcoming and represents who we are,” explains designer David Bromstad.
1. Emotional Attachment
Is your heart in this home? You need to answer that question before you can move on to the logistical issues involved in deciding whether to stay or go.
If you love the neighborhood or the schools, it might be worth the time and expense involved for you to stay and renovate. But if you’re not happy with your location or your neighbors, it might be time to sell and find a new home.
“Think honestly about your relationship with your neighbors and how you feel about your location and the surrounding area,” says Fred Wilson, of Morgante-Wilson Architects in Evanston, III. “If you have a strong connection to the neighborhood and emotional ties to your home, renovating may be the right answer.”
2. Return on Investment
Do some homework on the value of homes in your neighborhood. If other houses are selling for more than the value of your home, it might be a good choice to remodel, and you’re more likely to get a good return on your investment.
But if you already have the most expensive house on the street, remodeling might not make financial sense. You’re less likely to recoup your investment.
You’ll need to consider how much the renovation would cost and whether you can set a realistic budget — and stick to it.
Then you need to figure out how to pay for the renovation. There are options such as refinancing your mortgage, taking out a home equity line of credit or using personal savings. All have pros and cons, and you need to decide which would work best for your situation.
“This should include thinking far down the road. How long will you keep the home if you remodel it?” says David Wirth, a financial adviser with Savant Capital Management in McLean, Va. “Talking and putting in writing one’s goals is such a valuable tool for identifying the financial risks associated with dreams and aspirations.”
3. New Home Costs
If you decide to sell rather than remodel, there are other issues to think about. You won’t have the cost of renovation, but there are plenty of other costs associated with selling a home and moving.
You need to make sure you have the funds for both preparing your current home for sale and purchasing a new home to replace it.
To begin this process, you’ll want to find the right real estate agent who will help you determine if it’s the right time to sell. Your realtor will help guide you through what will likely be an emotional experience, helping you navigate everything from marketing strategy to home staging to accepting an offer.
Deciding whether to renovate or sell can be a daunting process. For more tips and support, contact me!
And remember, when you list with me, I stage for free when we use your furniture! I’d love to partner with you on your next home buying and selling adventure.