Renovate or Move: Which Is Best?
Every year in the U.S., about 15 million households relocate to new homes. The reasons for moving are varied, but a good number move because their current residences are out of order.
Houses are built to last a long time, but years of use expose them to wear and tear. Routine maintenance and repair should fix most of these issues, but there comes a time when a major renovation is needed.
This begs the question: should you renovate or move?
There isn’t a clear-cut answer as what works for another person might not work for you. A number of factors will influence your decision.
Read on to learn more!
The Cost of Renovating
Is it cheaper to renovate or move?
Renovating a house can cost anywhere from $15,000 to $200,000 depending on the size of the property and the extent of the renovation. The national average cost of moving hovers around $1,000.
Based on this alone, moving should be your option. However, comparing the costs of renovating vs moving isn’t the only way to look at it. Assess the cost of renovation in relation to your finances and the potential return on investment.
If you’re spending $30,000 on the project, for instance, and the renovations can yield over 50% ROI, you can conclude that it makes more financial sense to renovate.
Housing Market Conditions
As a homeowner, moving instead of renovating means you have to sell the property. Whether you’re selling before or after moving, one thing is clear: you want to make the most money off the sale.
However, selling a house that needs renovations presents a challenge. It’s not unsellable, but getting offers that match the valuation will be difficult, especially if the local real estate market is lousy.
This is why it’s important to consider housing market conditions. If it’s a seller’s market (more demand than supply of homes for sale), there’s a good chance you’ll sell the property quickly and at a price that’s close to what you asked.
If it’s a bad time to sell, you might want to hold off on moving; otherwise, you risk selling your house below its value.
Is It a Good Time to Move?
You don’t just move because renovating your house doesn’t make financial sense or don’t want to go through the trouble of trying to find the best remodeling contractor. Especially if you have a family, moving, which is one of the most stressful events in life, has to be the right decision for everyone.
For example, if you have schooling kids, you have to consider how moving will impact them. No parent wishes to transfer their children in the middle of a school year.
Renovate or Move? It Depends
Whether you renovate or move largely depends on your personal circumstances and real estate market prices.
Home renovation is a high-cost project, so you need to be ready financially. Moving is cheaper, but the cost of buying a new home can be prohibitive if prices are high. With this information, you’re in a better position to make a sound decision.
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