Unless you bought the perfect home and you know it’ll accommodate your needs as your life and family evolve, you’re going to eventually come to a crossroads. Do you stay in your home and renovate it to reflect your ideal style, spatial requirements, and layout configuration? Do you pick up and move into another home that fulfills all your lifestyle needs? Which is more taxing financially and emotionally? How long does all of this take? Can you afford any of this?
It’s an overwhelming prospect; the idea of either uprooting and leaving a home you love or displacing your family and all of your belongings for an extended period of time while your home undergoes extensive construction, but you can get through anything if you know you’re making the wisest decision.
Below are some factors involved in deciding whether you should renovate or list your home:
It’s difficult to sell a home you’re emotionally tied to. If you brought your babies home to the house, began your family there, or if it was the first home you could call your own, it’s understandable that you may want to stay. On the other hand, if your neighbors make you crazy and your basement is scary and too much of an undertaking to finish, or if your commute nearly doubles your work day, it may be time to list your property. The most difficult part of this decision-making process could be figuring out how you feel about staying or going. Make a list of the pros and cons of each and try to make this part of the process as objective as possible.
Can you afford the home you have right now? If you’ve exhausted all of your refinancing and remortgaging options and you’re still struggling, it’s time to either downsize nearby or find a similar home in a less expensive area further away.
If you have room in your budget to upgrade, you can start by searching for homes in your area that have all the things on your wish-list. Once you find a few homes you like, determine if you can afford their list price. Homes are selling for over asking in this market lately, so with that in mind, decide if you can afford more than what these homes are listed for. If not, it’s time to focus on renovating. Consult with a residential architect that’s familiar with your area so that you can discuss permitting, your ideas, what your budget will allow, and timeline. Make sure you leave extra room in your budget for incidentals and potential last minute finish upgrades. Those unplanned expenses are inevitable.
Spatial requirements –
If you’re going to stay, ask yourself:
- Do you need a larger living area?
- Are there enough bedrooms and are they big enough?
- Is there adequate storage and closet space?
- Are your bathrooms and kitchen outdated or lacking in function?
Then, meet with and discuss with an architect:
- Can the living area be expanded by removing and reconfiguring some walls?
- Is an addition recommended and can you build up or do you need to expand the floor plan?
- Will the outdoor area be large enough to accommodate an outward expansion?
- How likely is it that opening up walls in your home are going to uncover issues, like bad wiring, lead paint, or asbestos?
- How costly will it be to mitigate those issues to make sure all inspections pass?
Once you have all these questions answered, you’ll know whether or not a renovation is worth considerating.
Preparing your home for sale, listing it on the market, keeping it available and maintained for showings and open houses and then going through the transaction process once you accept an offer can take anywhere from 3 to 12 months or more. Then searching for a home, finding one- which can be dicey in this current market, putting in an offer, finally having your offer accepted, moving through that transaction, closing, and then moving is another few months. Buying and selling at the same time is common and possible, but it takes time, patience and a willingness to be flexible to those buying your current home and to those selling you the one you want to move into.
Conversely, hiring an architect, finalizing renovation plans, obtaining permitting, being displaced while the home is under construction, waiting for the structure, utilities, and finish work to be completed and moving back in can be a very lengthy and drawn out process. It’s hard to live in a home that is under significant reconfiguration- most of your belongings need to be moved out of the home or into storage, and living there in the meantime can be unsafe and potentially hazardous.
If it’s just you that needs to be considered, then you need to decide if you’re willing to undergo either of these processes. If you have a spouse or kids, the decision can become more difficult to make. Make sure you outweigh both of these processes before you pull the trigger. It’s recommended to that you ask friends and relatives who’ve experienced each process to help you make the decision.
Return on Investment –
Either way, you choose, you need to determine whether or not you’ll recoup any or all of your expenses. Determine what you’d have to spend to be happy with a renovation as well as with a new home. Then decide which option will be the sounder financial investment. If you’re renovating to stay forever or moving into your forever home, then there’s more flexibility as the investment will pay itself off over time. But if you’re renovating to only extend your stay with a definite move in the long run, or if you’re moving for to a new home for five or so years, you need to be smart and not overspend.
If you’re staying and renovating, look at the homes in your area that are comparable to your home in size and it’s post-renovated condition and see what their values are. Try to keep your spending within that range, so that if you do eventually sell, you’ll see a return or at the very least, make back a good percentage of what you spent.
The Bottom Line-
It’s an act of tipping the scales. There’s potential in either direction you could take. Formulating a dream renovation is easy when you’re standing in your kitchen at night. Likewise, picturing yourself moving into a larger, newer home is just as fun. It comes down to what makes the most sense for your budget, how flexible you are on your list of wants, and what you’re willing to go through to get there. It’s not an exact science making that determination, but if you consult with the right agents who know your area and what properties are selling for now and what they’re potentially going to sell for in the future, you’ll know if selling or staying is right for you.