All homes tend to need some renovation after a certain number of years. Homeowners often wonder if it makes more sense to build instead of doing remodeling when that time comes. There are a considerable number of things to think about when making this decision.
- Consider the return on investment. Take a look at where your house falls in terms of current value in the neighborhood where you currently live. If your house falls in the lower price range of the subdivision, it may make sense to remodel. You may have a better chance of getting back on that investment when you sell. However, if your home is at the very high end of your area, you may price yourself out of your neighborhood if you make significant changes. For example, a mid-range remodeling of the kitchen costs an average of $22,507, and a major kitchen renovation costs an average of $66,196, according to Remodeling Magazine. A mid-range bathroom addition can cost $47,427. If remodeling, those costs can add up quickly. This fixr.com article shows some of the most common improvements and what kind of ROI you can expect from each.
- Is it practical to remodel? Are you able to stay in the home while you remodel or will you need to move out temporarily? Are the renovations so extensive that it makes more sense to start from scratch? For example, are you wanting to entirely change the style in more than a couple of the rooms?
- Does it make more sense to sell and build in a seller’s market? Because of the shortage of houses that are active on the market, homeowners can usually sell without doing any major updates. Most of our TruMark Homes clients are finding it extremely easy to sell their home when doing a build job, which relieves a lot of the stress from the process. And after finding out what the home down the street from them sold for, they realize that they can easily have a large down payment for their new home.
- Can you find the resources to help with your remodel? Right now, it is difficult to find contractors for remodeling. Remodeling your home is a project that has to be managed. You will have to deal with people in your home, coming and going. There will be times when people may not show up. The time frame they give for completion is often extended past the estimated date of completion. It’s sometimes easiest and more reliable to hire a larger company to manage your project, but this can be more expensive. If you can do some of the remodeling yourself, this can help keep the costs down. But will you have the time to do it?
- Will this home be what I want in the next ten years? Are you happy with the location of the home? Does it have enough space? Are you wishing you had a more open concept? Renovating your current home may not give you that location that you are dreaming of. Maybe you want to re-configure and have a larger living space and fewer bedrooms. We call that “resizing”. Maybe you need a home office (or two). When you build a custom home, you will be able to take into consideration all of those things that will meet your current needs and desires.
Deciding whether to stay and remodel or renovate or to build new is not an easy decision. It’s a good idea to have an experienced real estate agent do an assessment of what your home value would be with and without a remodel or renovation. Then, sit down with a builder to price out a home that would check off all the boxes on your list. Gathering information and making the comparisons will help you make an informed decision.