At least that is the question a lot of homeowners we meet with ponder: Should I move to a new home, or remodel the home my family is in now? Well, since we at IHS B.C. do remodeling in Miami, FL, you should definitely remodel… JUST KIDDING!
With our housing market still down, you don’t want to rush into any decisions involving your largest asset. Does your family like the area and how long do you plan on staying in the home? You want to consider not only what your family will gain from your choice, but also the financial investment you stand to gain down the road. Your family’s well-being and overall happiness should always be at the heart of your decisions.
If your spouse, the kids and yourself love the neighbors and neighborhood, their school and your distance from work, changing the layout or adding space to your home by remodeling is probably a better choice. You will improve your enjoyment of your own home without losing your perfect location.
How long do you plan on staying? The investment in remodeling your home could take 5-10 years to fully appreciate in value, depending on what type of project you are planning. Spending $10,000 on remodeling will not add $10,000 to your homes value. There is no set percentage of gain from project to project or location to location. Kitchens and baths are always the best investments because people spend a lot of time there. Keep in mind you could always break down large projects into smaller sections, or lessen the scope, such as a kitchen re-facing versus a complete remodel.
Also, keep in mind that if your home is already the nicest in the neighborhood, putting on a room addition or renovating the kitchen will really not add much value to the home, only to your enjoyment of it. Now, if you are in a less valuable home, you can remodel to be average or above average with the other homes in the area. One example would be adding another bathroom if you currently have 2 but the others in the neighborhood have 3 to 4.
You must find a balance between Enjoyment & Investment Return to help steer your decision. Talk with an experienced contractor and real estate agent to get opinions and figures on the actual costs you are looking at. Take a look at this list Pro’s and Con’s to consider when you are thinking of remodeling or selling your home:
• You will see at least some return on your remodeling investment when you go to sell your home.
• More functional home, plus you will increase everyone’s enjoyment of it.
• Makes your home fit your family’s lifestyle better.
• Stay in neighborhood/school district you like,
• Certain projects pay off more than others.
• Don’t upgrade beyond what your neighborhood is worth – a $500,000 home in a $200,000 area won’t return the cost of remodeling. If your home is already the biggest and nicest around, it will not appreciate much more when remodeled.
• Remodeling is an invasive process.
• May take 5+ years to fully increase your home’s value.
• The layout you are looking for is already there with no time or work to be done.
• Your budget is the only limit on the size, style and area you move to. Depending on lot size, etc, you may not be able to remodel your current home into the dream you envision.
• Real estate fees– real estate commissions, taxes and closing costs; plus minor improvements in new home, furniture & window treatments, movers, etc
• Selling your current house.
• Cost of moving – time, money and energy spent moving