Home Remodel Ideas

Is it better to buy a house or remodel?

If you feel like you’ve outgrown your current home, you might be considering a move. And with housing markets around the country heating up with the weather, it’s peak house-hunting season.

But what if the idea of moving stresses you out? What if you like your yard and your neighbourhood, but just not your house? In that case, you may want to consider an alternative option. Moving isn’t the only way to get a larger home or upgrade your living space, after all. You could also remodel what you have — a move that has become increasingly popular as housing prices continue to surge and available inventory remains surprisingly low.

You’ve been in your house for a while and are still fond of the place. But it’s no longer exactly what you need or want.

So, do you put the home up for sale and move out, or upgrade and settle in for the long haul?

To answer that question, you’ll have to think about your emotional attachment to the house, whether renovating will bring a good return on your investment and whether you can afford to buy a replacement home. These and other factors will help you make your choice.

Here’s what experts believe are the essential issues when deciding whether to remodel your current place and stay put, or buy a different home and move out. Planning for a new look of your house? Look no further! Hitch Property Constructions is here to help in your home renovations.

The benefit of renovating and staying put

Renovating can be a hassle — but so can moving, and perhaps even more so. When you buy a new house, you’re signing up to pack up your existing home and move to a new one. And there are consequences to doing so.

For one thing, living in a new neighbourhood can be less convenient — you don’t know your way around, the stores aren’t the same, and the adjustment is potentially lengthy. Moving also means giving up the neighbours you like and the school district your children are enrolled in. That’s a big deal.

Home Renovation Ideas

Another good reason to renovate? You’ll have a home that caters to your specific needs. Say you’re unhappy with your outdated kitchen and want a new one. You could find a home with a brand new kitchen, but you may not love the colour of the cabinetry. When you stay in your home and renovate, you call the shots with regard to improvements.

Furthermore, you may find that renovating is more cost-effective than moving. When you sell a home, you need to pay a real estate agent a commission for facilitating the sale. Then, when you move, you need to cover the cost of moving, plus pay closing costs on your new mortgage. Renovating, meanwhile, can be done quite affordably if you have equity in your home, because that opens the door to a home equity loan or line of credit that gives you access to the money you need to make those improvements.

Also, the right renovations to your existing house could give you a great return on investment so that when the time comes to sell it, you’re able to command top dollar for it while getting to enjoy those updates yourself in the meantime. And, in some situations, renovating could make it possible to turn your home into an income source. If you finish a basement, for example, there could be the option to rent it out to a tenant.

The benefit of buying new

On the other hand, there are plenty of good reasons to buy a new home rather than renovate. First, you’ll avoid the annoyance of having to live in a construction zone for a period of time. You’ll also get out of dealing with the logistics of renovating, from securing permits to reading up on building code requirements.

Furthermore, if the cost of your renovation is substantial, you may find that moving to a new home makes more financial sense. Though you will need to apply for a new mortgage, interest rates are relatively low right now, and if your credit is strong, there’s a good chance you’ll score an affordable mortgage.

Finally, moving to a new home gives you a chance to enjoy different amenities that may not be available in your neighbourhood. And if you find an area with a superior school system, you may find that moving is a positive thing for your children.

At Hitch Property Constructions, we offer a wide range of home renovations.

Relocating

Selling your old place before searching for a new place can be a long, extensive process with an exciting result. And it can be both stressful and arduous if you don’t approach it correctly. Here are some of the advantages and disadvantages to weigh in the process:

Advantages

  • New beginnings: You get to start over in a new place — whether it’s down the street or in a new neighbourhood, city or state — beginning again with your family and belongings. You get to meet new people, decorate your new home and settle into a new landscape.
  • Financing options: Once you’ve bought a house the first time, it’s easier the second or third time around to go through the paperwork and purchase process. Your agent will help with title, insurance, taxes and finding a quality lender to help you buy the house.
  • Income taxes: Depending on your state laws, selling your old home could land you extra money in your pocket without added taxes because of the capital gains exemption (which is up to $250,000 and $500,000 for married taxpayers). There also are eco-related tax credits available if your new home qualifies. You should check with your real estate agent and tax filer.
  • High costs: Selling a home involves paying your real estate agent and other fees throughout the process. It’s long, complicated and expensive, and you have to be willing to go through it to acquire your new place.
  • Moving: Moving can be a problematic process because you always find stuff in your old place that you never used. That leads to sorting, throwing away and trying to pack everything within a short timeframe. It’s added stress that can be overwhelming at times.

Disadvantages

  • High costs: Selling a home involves paying your real estate agent and other fees throughout the process. It’s long, complicated and expensive, and you have to be willing to go through it to acquire your new place.
  • Moving: Moving can be a problematic process because you always find stuff in your old place that you never used. That leads to sorting, throwing away and trying to pack everything within a short timeframe. It’s added stress that can be overwhelming at times.

Remodelling

While your current home may seem drab at times, remodelling the space allows you to create new spaces, update its function to meet your needs and create an ideal home, depending on your budget. However, it comes with a lot of disadvantages that may or may not be worth the investment.

Hitch Property Constructions has the best range of renovations services to help you create your dream house.

Advantages

  • Costs less: The cost to remodel your home is less than buying a new home because it’s on a room-by-room basis. You don’t have to remodel everything in your home, which means your budget can flow with what you need to do. Moreover, there are ways to save money on your renovations so that you get a great end product without spending a fortune.
  • Personal touch: Renovating allows you to change your existing home to meet your expectations and desires, as compared to buying a new home that may have a few features you want but not at all. Why spend hundreds of thousands on a new house and update it when you can keep your old home and update it a little at a time?

Disadvantages

  • Not for major overhauls: If your home needs a complete do-over, then a remodel isn’t for you. It’s not worth the investment to spend thousands of dollars to change every single room in your home when you could buy a new house with all of the updates. It’s better to renovate a few rooms in your house rather than all of them. It’s also not worth it to remodel your house if you’re trying to downsize.
  • Financing issues: Remodeling requires a homeowner loan, family loan, payments to contractor or vendor loans. You must have home equity, so if you haven’t lived in your home for a long time, it could be hard to get approved.
  • Construction: Remodeling means your home will be in shambles for days to weeks as the room is updated. You can choose to stay in a hotel — which means spending a few extra dollars — or stay in your home. It’s a bit stressful and loud — and it requires patience, which not every homeowner has.

Other Issues to Think Through

In addition to the considerations above, there are financial implications that come with both choices. Borodin says you have to run the numbers on how much equity you have in your current house, the price point of what a new house will cost, and whether either option will leave you better off financially.

It also makes a difference whether you got a great deal on your existing home or not. If you bought low and housing prices are currently high where you live, you may not want to start over with a bigger house and a bigger mortgage. You may have lots of equity in your current home, but you’ll deplete it if you sell and buy a home at a much higher sales price.

On the flip side, there are times when you don’t have much choice in terms of what to do. Vickery notes that remodelling isn’t always an option, since there are times when even a full remodelling project won’t address the biggest problems with your home. If you live in a condo, for example, you probably can’t just add a room for more space.

Finally, don’t forget that moving may have tax consequences that could be either good or bad. For that reason, it may be wise to consult your financial advisor or accountant to see how selling your home or moving could impact your bottom line.

Ways to know whether to remodel your home or move

Is your home in your heart?

Your emotions will have a lot of say in whether you stay or go.

“Think honestly about your relationship with your neighbours and how you feel about your location and the surrounding area. If you have a strong connection to the neighbourhood and emotional ties to your home, renovating may be the right answer.”

Seventy per cent of homeowners in the remodel-or-move quandary ultimately decide to stay put and make changes to their house.

A residential architect may envision upgrade possibilities you may not see and help you get maximum functionality out of the home you already have. You might tap your home equity to pay for the improvements.

Can you budget realistically?

Realistic budget planning is critical when deciding whether to do your current homework or look for another one.

Budgeting accurately is essential if you do decide to renovate.

“A lot of homeowners don’t know exactly what they want,” says Prashanth Pathy, an agent with Keller Williams Realty in Chicago. “Say they have $50,000, and the contractor says he can do it for that. But then their wishes change, they want different materials, it doesn’t come out as they imagined — and that’s where the budget gets blown up.”

More room or more rooms?

Many homeowners base their decision to sell on the need for more space. However, a smarter layout that adds one more room but not square footage can help some homeowners avoid moving.

A spacious three-bedroom home can often be reconfigured to four bedrooms and allow a family to have a more efficient layout without needing to leave the home they love. We recommend laying out your floor plan with a designer and seeing if a reconfiguration could make sense. It is often much less disruptive and expensive than a move, and may solve your problems.”

If you can’t find a spot for a new room? “Maybe it is time to sell.

Will only a move be enough?

Does your current home have what you consider to be a serious problem? It could be neighbours you can’t tolerate, a not-so-great school district or a cramped physical setting — including home and yard — that will never meet the needs of your growing family.

If that’s the case, you have just one choice: Move.

But maybe the issue is that you essentially can’t afford the home you currently have, so a downward rather than upward move is necessary.

This is fairly common. The 2016 “How Housing Matters” survey from the John D. and Catherine T. MacArthur Foundation found that more than half (53 per cent) of Americans struggle to make housing payments and have had to make sacrifices or trade-offs to cover those costs.

How long will a renovation take?

Many people overlook the fact that renovation involves “a serious, long-term commitment in time and energy. They have to get their head around the process — time being the first and foremost consideration.

A kitchen remodel involving new countertops, cabinets, appliances and floors can stretch on for three to six months. If ductwork, plumbing or wiring has to be addressed, the job could take longer. A bathroom can require two or three months, while a room addition can take a month or two.

You have to be ready to be very patient. It’s very difficult to live in something that’s being renovated.”

Will you earn back the upfront costs?

Before opting to remodel or sell, try to determine what return on investment you’ll see on either option. 

If upgrading, “What’s the average return on investment for the renovations you’re considering?

Most home upgrades do not pay for themselves in the form of a higher eventual sale price. Some renovations manage to recover 80 to 90 per cent of their costs, while others barely cover half their expenses.

If you’re thinking of listing your current home and buying another one somewhere else, ask yourself whether you’ll be in the new place long enough to recoup the costs of taking out a new mortgage and moving it has traditionally taken seven years to earn back those upfront costs.

Would you be ‘over-improving’?

Weighing against renovation is the risk you’ll “over-improve” your home compared with others on the block.

An over-improved home won’t sell for as much in its location as it would in a neighbourhood with similar houses.

“When you are in a neighbourhood that has starter homes and smaller homes, adding a large addition or doing an extensive renovation may not yield the return one would expect.

With one of Lawton’s listings, sellers had added a large, handsome fifth bedroom suite to the first floor. Buyers passed on the house for smaller ones in the same development, and the house lingered unsold even after the sellers chopped $30,000 off the price.

Move or Stay Put? Here’s How to Decide

While there are no hard and fast rules to determine whether you should sell your home or stay put, realtor Don Cramer of Urban Nest Realty in Las Vegas says there are plenty of questions you can ask yourself that will help you decide.

For starters, you should ask yourself what your housing goals will be in the next five to 10 years. If you like your home and it works for your job and your family, then it can make sense to remodel and work with what you have. If you plan to move in a few years anyway, then you may want to consider staying where you are and not remodelling, on the other hand. Since it’s unlikely you’ll get all your money back out of a remodel when you sell, spending a ton of cash on a huge project may not make financial sense.

Also, consider how your lifestyle will come into play — both today and tomorrow, says Cramer. Are the kids now out of college and starting families on their own? If they are or soon will be, you may not need a larger home at all and could benefit from a simple remodelling project to improve your home’s flow or make it more comfortable.

Also, consider your finances. Moving can be extremely expensive, but so can remodelling. Before you choose either option, make sure you can truly afford it. The money you borrow will ultimately need to be paid back, so you should be prepared to pay for your dream home for the long haul.

What’s the best decision for you as a homeowner? Is it time to make a move into a new home, or is yours just in need of a few fixes? Whichever you choose, get the finances, paperwork and appropriate professionals lined up before your procedure.

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