In nearly every homeowner’s life, there comes a time to answer the question: should we fix up our home or sell it and move? Maybe your growing family could use more space to gather together. Or you’d love a chef’s kitchen to better enable your culinary chops. Perhaps you’re a homeowner who wants a more accessible home for the future.
Whatever your situation, consider both sides before making this big decision.
Questions to Answer
First, find out:
What your home is worth in its current condition? You can ask a real estate agent for a market analysis. You can also research similar homes in your area online.
What would renovations cost? Have a contractor estimate the cost of the remodeling. You may want to have him or her draw out (known as “spec” for most home builders) your dream renovations as well as something more modest in case you need to scale down.
What would a new home with the features you want cost? Again, a real estate agent or online sites can help you estimate the cost.
How much would you need to borrow in either case? If you decide to renovate, you may need a home equity loan to cover the costs. If you decide to sell and buy a new home, estimate your new mortgage payment.
Lifestyle and Neighborhood Considerations
Once you have a good idea of the financial implications of renovating versus selling, ask yourself the following:
What are some of the advantages to staying? Is my home in a good school district? Do we like the neighborhood? Is it a convenient commute to work?
What are some disadvantages? If we renovate, would we “over-improve” and be unable to recoup our costs when we eventually sell? How much disruption will renovation cause?
What are the advantages to buying a new home? Can we find everything we want in a neighborhood we like at a price we can afford?
What are some disadvantages to moving? If we like our current location, could we afford the type of home we desire nearby?
The Next Step
If you decide to sell, you may want to make some minor updates so your home shows in the best light. A fresh coat of paint and spruced-up landscaping can help make your home more appealing. You’ll also want to reduce clutter inside and out.
If you decide to renovate, make a list of your must-haves and nice-to-haves. That way, you can prioritize if some of the renovations are out of your budget. Don’t skimp too much, either. After all, you’re making an investment in your home to improve it and create a more comfortable living situation for years to come.