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Renovate or Relocate: A Homeowner’s Dilemma

June 24, 2024

Are you torn between the idea of renovating your current home or moving to a new one? It’s a common dilemma many homeowners face as they weigh the pros and cons of each option. Both renovating and relocating have their own set of advantages and challenges, so how to decide what to do? In this article, we explore some factors to consider when deciding whether to remodel or move.

Assess Your Current Space & Situation

Start by evaluating your current home and identify the reasons you’re thinking about making a change. Does it meet your needs in terms of space, layout, and functionality? Are there specific areas that require improvement, such as an outdated kitchen or insufficient bedroom space? If your home has good bones and only requires minor updates, a renovation might be the more cost-effective solution.

Consider Your Neighborhood

Think about your neighborhood and community. Do you love the area you live in, including factors like schools, amenities, and proximity to work? If you’re attached to your neighborhood and have strong ties to the community, renovating your current home allows you to stay in the area you love.

Budget and Financing

Take a close look at your budget, savings available, and financing options. Renovations can be costly, especially for major projects like kitchen remodels or room additions. And sometimes there are surprises uncovered during construction, leading to budget overruns and delays. Determine how much you’re willing to invest in renovations and whether it aligns with your other long-term financial goals. If renovating would stretch your budget too thin, moving might be a better choice. Keep in mind, though, that moving incurs costs too – your new mortgage rate may be higher than your current loan, and you’ll also have real estate agent fees, closing costs and moving expenses.

Future Needs and Lifestyle

Consider your future needs and lifestyle preferences. Are you planning to expand your family, work from home more often, or retire soon? Your current home should accommodate your evolving lifestyle and provide the flexibility to meet your changing needs. If your current home lacks the space or features you’ll need in the future, moving to a new home might be a more practical option. Think of it as a ‘fresh start’ that you’ll get to enjoy right away after finding a property that better aligns with your needs and preferences.

Market Conditions

Take into account the current real estate market conditions in your area. Are homes in high demand, with limited inventory and rising prices? If selling your home would yield a significant profit and allow you to upgrade to a more suitable property, moving could be a better financial decision. Conversely, if the market is slow or uncertain, staying put and renovating your current home could be a more prudent financial decision. But be careful about over-improving your home! For example, unless there’s a very strong reason, you don’t want to put a $200,000 kitchen into a neighborhood made up of $400,000 homes.

Timeline and Disruption

Consider how much time and potential disruption would be associated with renovations versus moving. Renovations can take weeks or even months to complete, depending on the scope of the project. Are you prepared to live in a construction zone and deal with the inconvenience of temporary disruptions? On the other hand, moving involves finding a new place to live, packing, coordinating logistics, and adjusting to a new environment, each of which can be stressful. And relocating often involves leaving behind familiar surroundings and community connections, which can be emotionally challenging for some homeowners.

Ultimately, the decision to renovate or relocate depends on your individual circumstances, preferences, and priorities. Whichever you choose, the goal is to create a living space that brings you joy, comfort, and satisfaction for years to come.

If this is a quandary that you are facing, a financial planner can help with evaluating your options, weighing the pros and cons of each, and prioritizing what’s best for you and your family in the long run.

P.S. – You can see from the above photo what I personally decided to do about this question!

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