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Does It Make Sense to Remodel My Existing Home or Should I Buy or Build a New One?

This is one of the most common questions posed by homeowners considering a remodeling project. While there is no perfect answer to this question, there are some criteria that you can use to help you make your decision.

For most people, money will play a dominant role in this decision. Therefore, your decision as it relates to your budget should be based on the amount of work your current home needs to turn it into your dream home.

Here are Some Points to Consider...

You should remodel your home when:

  • You love your neighborhood.
  • You like your current home with few exceptions.
  • You have an emotional attachment to your home and have the money to make the changes.
  • You would rather invest money in your home than in closing costs and moving costs.
  • Property values in your neighborhood are rising.
  • Your home is not at the peak value for the neighborhood.

You should move or build a new home when:

  • Lots or existing homes are available in an area or neighborhood you really like.
  • The cost of remodeling your existing home will far out pace it's resale value.
  • You want to live in a home that has a special view or unique amenities that cannot be added to your existing home.

So how do you evaluate your situation? Do a little homework with regard to the trends in your neighborhood. Take a look at the values of the housing around you. If your house is already priced at the top of the market you may not be able to recoup the cost of an extensive remodeling project. On the other hand, if your home is valued lower than those around you, you may experience a great increase in appreciation through a well-planned remodeling project.

Building a new home also requires a lot of homework. Ask yourself what your family's needs are with respect to space, location, lifestyle, hobbies and commutes. What kind of community appeals to you? What are the trends in the neighborhoods you would consider building in? And of course, how much will it cost to build and relocate to a new home? Don't forget to figure in the costs not directly related to the construction of your new home such as closing costs, property taxes and moving expenses.

Remodeling and building are both viable options. There is no substitute for good research when it comes to assessing the trends and history of home values in your neighborhood. Consult with a professional Realtor before making your final decision.

 

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