Should You Stay or Should You Go? How to Decide Between Renovating or Buying a New Home

Should You Stay or Should You Go? How to Decide Between Renovating or Buying a New Home

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You’ve achieved the dream of being a homeowner, but after being in the same home for a while, maybe you’ve started wondering if it’s time to move on. The big question is whether the time is right to move, or whether you’d be better off making renovations to turn your “starter” into the home you’ve always wanted. Either one is a big undertaking, so you want to be sure you’ve considered all the financial and personal issues involved.

The Local Real Estate Market

When you’re already a homeowner, the process of moving includes the added step of selling your current home, which means you’ll need to get a feel for trends in your local real estate market. You’ll want to research the average price homes are selling for, how long they’re on the market, and what’s available in the areas where you want to live. This should give you a good starting point, but of course, your home’s value will also be based on other factors, such as the size and any updates you’ve made.

When it comes to determining if the right new home is on the market, taking a look at local listings will give you an idea of what’s available. One of the biggest things to consider is whether being in a specific neighborhood is a make-or-break issue for you. As the stars of the hit series Property Brothers told CNBC, wanting to be in a certain location is a major factor that may sway you one way or the other. Whether you move or stay, you can almost always make changes to a home, but the location is something you can’t change.

Other Financial Considerations

The biggest financial questions are how much you can make on the sale of your home and how much it will cost to buy the new home you’re envisioning. These are the big-picture questions, but there are lots of other financial issues involved too, such as interest rates and all the other costs that come with buying and selling a home.

According to Business Insider, another essential question is whether you expect any other big expenses over the next few years. Sure, there are times in life when major expenses catch us off guard, which is why any homeowner should have an emergency fund for house expenses in addition to other savings. However, there are other major expenses we can see coming, such as planning to start a family or knowing your kids will be going to college soon.

Short- and Long-Term Plans

The financial issues are obviously a big part of this decision, but there’s more to it than the financial transaction. Your home is where your everyday life happens, which is why your life plans are a major part of this decision too. For example, if you plan on starting a family soon, the cost of moving may be too great to justify the move. On the other hand, you may need extra space or want to be in a different school district.

When you think about your short-term and long-term life plans, there are also the questions of practicality and how that factors in. If you’re thinking about remodeling your current home to make it fit those plans, have you looked into the scope of the projects, how much they’ll cost, and the feasibility of getting the design you want? If it’s possible to get the features you want from a renovation, and you can afford it, you may be happier going this route and getting the truly customized home you’ve been wanting. You may also want to complete remodeling projects that add value to your home, such as adding cabinets and backsplashes to your kitchen or windows to your bathroom.

The phrase “starter home” usually refers to the first home you buy. For some families, your starter home may have the potential to be your “forever home.” For others, you simply know when it’s time to move on. With both financial and personal issues in mind, this question is ultimately one that only you can answer.