Should You Remodel or Move?
Change is inevitable. This old adage is as true for your home as for anything else. You may find your current home not as satisfying or fulfilling as it once was. Maybe you need a separate room for your second baby or want a bigger bedroom or a larger kitchen or set up a home office. It leads to the dilemma that every homeowner faces at least once in their life: Should I remodel or move?
Questions to Ask Yourself:
Here are some important things you must consider before you make the decision:
1. Why Do You Want This?
Be as clear as you can on this question. Do you have to have a new home with a playroom or home office? Or will it make more sense to remodel your current home and make space for additional rooms? You would be surprised how much extra real estate you can squeeze out from your current home with minor tweaking of the property layout.
2. Is Your Family Okay With Moving?
Moving to a new location affects your entire family, not just you. Your spouse and your children should be onboard with moving if it comes to that. You must involve them when deciding without discounting their thoughts and opinions.
3. Is This The Right Time to Move?
You must factor your personal and work circumstances into your decision. Moving to a new place will also impact your spouse’s and children’s lives. You may have to find a new school for your children, and you and your spouse may require taking a longer commute to work. Changing your locaation is bound to disturb your status quo, so it is crucial that you give serious thought to your present circumstances before deciding.
4. How Badly Would You Miss Your Current Home?
You may have formed an emotional bond with your current home. Pay careful attention to how you feel about leaving all the memories behind and moving when you can simply remodel your home and continue living where you built your life.
5. Are Your Finances in Order?
Investing in a new property may put the proverbial wrench in the financial works. Consider your present mortgages, insurance plans, car loans, investment deposits, and monthly expenses — do not leave anything out. Moving to a new place might pile on a few additional expenses on your monthly budget.
6. Will You Get a Good Price For Your House?
You must measure the odds of your house selling at or above the asking price. Real estate prices are in a constant state of flux. Unless you are on top of the market conditions, it is likely that you may not get a reasonable price. If you have any doubts regarding the actual market value of your house, it makes more sense to invest in remodeling than in a new place.
It is common for homeowners to face buyer’s remorse if they don’t think ahead and consider the total cost of moving. Let’s peg the costs of relocating against the cost of remodeling to gain a better insight into the cumulative costs of both.
Costs of Moving
The price of the new house is just the start. There are numerous direct and indirect costs linked with moving to a new home.
1. Renovation costs
If you want a good price for your house, you will have to incur some minor expenses on fixing your current home before you put it up for sale. Repair costs may potentially include:
- Plumbing and leaks – $150 – $350
- Minor paint repairs – $200 – $400
- Electrical rewiring – $500 – $800
- Other home preparations – $2,000 – $3,000
- Major repair for older houses – $25,000 – $ 50,000
2. Selling costs
Doing all the necessary renovations increases the chances of your house fetching a reasonable price. However, there will be two additional expenses that will increase the total selling costs:
- Agent’s commission – about 5% to 8% of the selling price.
- Title Insurance – $2,000 – $5,000
3. Capital gains tax
If the value of your property has appreciated by more than $250,000, you will be liable to pay capital gains tax at 15% or 20%. The tax will vary based on your taxable income and filing status. You may be further liable to pay state or local capital gains taxes depending on where you live.
4. Buying costs
Many homeowners do not consider secondary costs when buying a new property. You may have to bear any or all of the buying costs listed here:
- Higher maintenance – If you are upscaling, your monthly maintenance may increase by 5% to 10%.
- Higher cost of living – Depending on your new locality, your monthly budget may take a hit.
- Higher property taxes – If you are upsizing, your property taxes will increase by 0.27% to 2.47%.
- Refurnishing and remodeling – $5,000 – $12,000.
- Mortgage costs – About 5% on average on total mortgage.
5. Relocating costs
The costs of relocating will differ according to packing size and distance. But this is how much you can expect to pay for moving:
- Basic expenses (Local) – $800 – $2,200 plus $60 per hour for packing per mover
- Basic expenses (Inter-city) – $2,200 – $10,000 plus $500 – $5,000 for packing.
When all the secondary moving costs are combined, you can expect a cumulative cost of $95,000 to $120,000 over and above the price of the property. Now roughly estimate by how much remodeling will set you back.
Costs of Remodeling
The cost of remodeling varies according to the size of the property and the scope of remodeling. But there are some common expenses you will likely incur when remodeling.
- Architectural planning – $2,000 – $8,000.
- Remodeling permits – $50 – $500
- Labor costs – $25 – $150 per hour
Here are the average costs of remodeling in the US as per HomeGuide in 2022:
- Bedroom/Living room remodeling: $1,000 – $10,000
- Kitchen remodeling: $10,000 – $50,000
- Bathroom remodeling: $5,000 – $25,000
- Whole house (small): $15,000 – $40,000
- Whole house (large): $40,000 – $75,000
And here are the average home renovation costs as per HomeGuide in 2022:
- Low-end houses: $19,875.
- Mid-range houses: $44,850.
- High-end houses: $73,198.
If the cumulative costs of remodeling are lower than those of relocating, it makes sense to prefer remodeling your homes.
By now should have some clarity over your predicament. If doubts remain, carefully consider the pros and cons of moving and remodeling and measure them against one another to find which one outweighs the other.
Pros and Cons of Moving
Pros of Moving
- Get a Fresh Start: Relocating allows you to start your life anew. A brand-new neighborhood can help you make new friends and find meaningful connections. It can also act as a breath of fresh air if you feel your current neighborhood is too congested or stressful.
- Move Into a Bigger Home: You can move into a bigger home in a better and upscale neighborhood. If you can afford the higher maintenance moving into a bigger home entails, relocating can be a good move.
- Avoid Remodeling Inconveniences: There will be some inconveniences when you are remodeling your home. You may have to put up with constant noise and the hustle-bustle of workers or find temporary accommodation elsewhere during the interim. You will avoid all these inconveniences by relocating.
Cons of Moving
- Can Be Expensive: Relocating is an expensive affair in the long run. It is worse if you don’t get a good price for your current home in the tumultuous real estate market. You must also factor all indirect costs such as moving costs, mortgage payments, and taxes into the equation too. It is common for homeowners to default on their loan payments after moving into a high-maintenance neighborhood without a corresponding increase in their incomes.
- Your New Home May Require More Work: A recent survey by Zillow Group found that almost 75% of homeowners regret buying new homes for many reasons. But the prominent reason headlining the result was their new places requiring fixing and other hidden costs.
- Leaving Behind Emotional Connections: You will have to prepare to let go of some of the emotional connections you formed while living in your current home. You will not only be leaving your home but also your neighbors and friends who may have become a permanent fixture in your life.
- Difficulty in Adapting: Homeowners may not always adapt to their new surroundings. You may have to commute longer or put up with an unfriendly neighborhood. Difficulty adapting to your new environment is a significant concern, and every homeowner must be conscious of this when they deliberate moving into a new place.
Pros and Cons of Remodeling
Pros of Remodeling
- Your Home As You Like It: Remodeling your home will allow you to customize it’s layout precisely the way you want it. You will have granular controls over everything. You won’t have to compromise on your needs or settle for lesser quality.
- Increase The Value of Your Home: Your home will look amazing once the makeover is complete, and there will be a multi-fold increase in its value. It will be easier to get offers matching your asking price when you eventually put it up for sale.
- No Change In Lifestyle: This is the only option that lets you continue following the lifestyle you currently enjoy and to which you are accustomed. There may not be any drastic increase in your monthly expenses except for payments towards the remodel itself — if you decide to go that route.
Cons of Remodeling
- Living Through Construction: Some homeowners may find it a nuisance or interference in their life with all the constant noise and work. Unless you mentally prepare yourselves for it, living through construction work will be challenging.
- Higher Taxes: Be prepared to pay slightly higher property taxes if you are making additions to your home area.
A Final Note
The choice between remodeling and relocating has far-reaching consequences. Be sure to take your time measuring the pros and cons of both options, and also include all your family members in any discussions. What matters the most is your and your family’s satisfaction and happiness and deciding together will minimize any risk of regret in the future.
Let Us Help You With Your Remodel!
At McManus Kitchen & Bath, we want to make sure our clients have all the knowledge they need to make smart decisions. Thats why we make blogs such as these! If you choose to remodel in the Tallahassee area rather than move, reach out to us and schedule an appointment. We’d love to hear from you.
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McManus Kitchen and Bath is a design and build company specializing in kitchen and bath remodels.