You spent years working hard, saving your money, and dreaming of homeownership. After all, it's a big part of the American dream! You finally found the perfect place that met all of your family's needs.

Then one day, something changed. You woke up, and your house just doesn't fit your needs anymore. Maybe you're expecting a new family member, or your parents are getting older and need help taking care of themselves, so they're moving in. Whatever the reason, suddenly you have an essential decision to make... do you take on a home remodeling project or move into a new home?

In this post, we'll explore your options to help you decide whether to undertake a home remodeling to meet your family's changing needs. We'll help you make an informed decision between home remodeling versus moving, some common remodeling projects, and their investment return.

Rule 1: Location, Location, Location

If you're like most homeowners, you purchased your home based on its location, and that's the place to start when deciding on remodeling or moving. For example, does your home's current location make your life easier? Is your commute to work manageable? Are you happy with your children's school? Think about the places you typically visit like church, shopping, and your friends and family.

If your current home no longer meets your needs, it should impact your decision to move. However, suppose the location of your home is ideal. In that case, the next step is to more closely examine your house and if it is feasible to remodel it to better meet your needs. Think about your home's functionality and gauge your neighborhood. Suppose adding square footage to your home better meets your needs, but the cost of the project would be more than your home is actually worth. In that case, an addition would not be the best option financially.

Rule 2: Don't Ignore Your Emotions

Your emotions will and should factor into your decision. Often you'll have built an emotional connection to your home that no new home can match. You may have memories of starting your family there and raising your kids, or maybe you inherited your family home from your parents. These are the types of feelings that could impact your choice to move or to stay in your current home and remodel.

Check The Comps in Your Neighborhood

As part of your due diligence, you'll next want to figure out what the market will bear. Speak with a local real estate professional and have your house appraised as it is. Look at other homes that have sold in your neighborhood that already have the improvements you're considering. This will help you see the potential for your return on investment.

Suppose you can complete your home remodeling project without closing the gap between your home's current worth and future value post remodeling. In that case, it's worth moving on to the next step. However, if your home is already valued at the top of the neighborhood's range, you might not see any return on your investment.

So... Should You Move or Remodel?

Before you pull the trigger on either option, there's one more step. You need to look closely at your costs. Compare the cost of moving versus the price of a remodel. Look at the expense of a new mortgage versus a cash-out refi or an equity loan. Make sure you factor in every contingency, including interest rates and fees, the costs of moving, and include takeout meals, and hotel stays if you'll need to move out for a while.

Also, make sure you compare apples to apples. Look at the average cost of a house with the additional features you seek in a neighborhood similar to your home's current location. In today's active market, many homeowners are surprised to find that it's often cheaper to remodel their existing home instead of building or buying a new home to meet their changing needs.

 

Choosing Home Remodeling

If you make the decision to remodel, chances are you're not thinking about selling your home. However, it's still a good idea to consider potential future buyers' tastes and needs when you remodel.

Remodeling Magazine publishes an annual report evaluating the potential return on investment for many home improvements. Their figures are based on regional variations. Here are some general examples of ROI.

Project                                                                            Return on Investment

• Replacing Windows                                              78.7% - 79.3%

• Replacing Garage Doors                                         82.9% - 83.7%

• Replacing Exterior Siding                                              78%

• Building a New Deck                                                       87.4%

• Adding an Extra Attic Bedroom                                  84.3%

• Finishing the Basement                                                 77.6%

• Kitchen Update – Counters, Cabinets, Appliances  82.7%

• Kitchen Update – Complete Major Remodeling          63.6%

Finally, a major factor that should influence your decision is your quality of life. Many intangibles like your neighborhood, proximity to schools, culture, nightlife, work, and family should be considered. Resale isn't everything!

Even if you likely won't recoup your investment when you sell, it's ok to make the investment if you love your current home. Just understand it's an investment in your quality of life.

Seek Out Expert Advice

As you're doing your due diligence and evaluating your finances, if you're still unsure which path to choose, reach out to professionals for their expertise, experience, advice, and perspective. Speak with a professional design-build firm to better understand the costs and possibilities for your home remodeling project.

For example, upon inspection, you might find that local building codes prevent adding an addition. You could still finish your attic, basement, or garage to create the space you need without permitting problems. 

If you're considering a new home, speak to a local real estate professional to see what's available in your area and compare the value of a new home versus remodeling your current one.

If you're planning on refinancing to cover the cost of remodeling or need a mortgage to purchase a new home, shave your local bank or mortgage lender run the numbers. The bottom line... whether you choose to remodel your existing home or buy a new home to meet your changing needs, professionals can make the process easier. Professionals can provide you with the knowledge, experience, and expertise you need to ensure that you'll be happy with your decision well into the future!

If you're unsure if remodeling is the best choice or just want to explore your possibilities and you live in the West Central Alabama area, call the experts at Toulmin Kitchen and Bath at (205) 579-9906. We're always happy to answer any questions you may have. Let us help you design the perfect space to meet your aesthetic and functional needs.