Should You Renovate Or Relocate?
The decision whether to renovate your existing home or move to a new house is one that most people will have to make at least once. While some choose to relocate to a home that better fits their needs, others create their so-called dream home by adding or upgrading their current home. Perhaps they expand and remodel their kitchen, add electric radiant heating to the bathroom or create a luxurious master bedroom in order to stay put.
While some people approach the decision-making process by making a list of pros and cons, experts say there really are two main considerations when deciding whether to stay or go - financial and emotional.
Should you stay?
The possibilities are endless when it comes to renovating a home. However, experts say it's important to take into consideration how the work will affect the value of your home.
"Almost without exception, if you have a viable neighborhood and if you are bringing your home up to or slightly above neighborhood standards, from the financial side you almost can't go wrong by renovating," Dan Fritschen, author of "Remodel or Move?", told Bankrate.com. "On the other hand, if you already have the biggest, nicest house in the neighborhood, then to go in and change that house has some drawbacks. You won't get it back on resale."
Remodeling Magazine's annual Cost Versus Value report can help give you an idea of whether the changes you're considering will be recouped if you decide to sell a few years down the line.
Other considerations are more personal. For instance, do you like the location, the neighborhood and your neighbors?
Should you go?
The good news for those considering selling their homes is that the housing market has improved in most areas of the country. However, the fact that you may owe the bank money if you sell your home is often enough to discourage many people from putting their houses on the market.
If it makes financial sense, and you're unhappy with the things you can't change about your home, like the location, lot size and neighbors, it is likely time to pack up and look for a place that better suits your needs.
"A home, while an investment, is really about lifestyle first and an investment second," financial planner Ray Ferrara, told Bankrate.com. "The decision of moving versus remodeling is: Does your current home, if remodeled, make you happy? If your home, even if remodeled, doesn't meet your needs, and if you can afford something else, then move."