Should I Renovate or Buy a New Home?
It seems we’re always discussing the benefits of buying versus renting and vice versa. Yet, we rarely discuss the conundrum that faces millions of homeowners every day: should you renovate your existing home to suit your needs or find a new one where the needs will already be met? There’s certainly a lot to consider.
Are market conditions optimal for a move? The answer to this question is yet another question. Are they ever? Meaning, if you’re delaying a move because the current state of the market doesn’t match your expectations, you might miss out on your dream home. The one that meets all your needs and more, as a homeowner. There’s certainly been a lot of talk concerning real estate interest rates in the last two years and rates continue to be a concern. The good news? Rates are still below historical highs and even though the Federal Reserve opted to hold them for the time being, they have repeatedly signaled that rate cuts are coming sooner than later. If no amount of renovation is going to get your current home to the level it needs to be to support your needs, buying a new home just might be the way to go. Remember, your interest rate can be adjusted later on.
Would the cost of renovations be comparable to a new home purchase? If you find yourself in a situation where the cost of repairs, upgrades and additions would match or exceed the value of your home, perhaps a move is the smarter option. Especially if you can find a home that already comes equipped with the amenities you desire. For instance, if a kitchen remodel is going to set you back $30,000 but you’re still short on bedrooms, it’s probably worth considering a home that already has the updated kitchen and the right number of bedrooms. In that situation, you’re likely to save money in the long run by upgrading to a larger home as opposed to building on the current one. Of course, there are always exceptions and the costs can look quite different depending on where you live and what’s available in your marketplace.
Renovating vs. building. Setting aside the possibility of buying an existing home that meets your family’s needs, you might be faced with a question of, “Can I turn my current home into my castle in the sky or do I need to build it from scratch?” In this case, renovations will almost certainly save you money. With a renovation, there’s already an existing structure to mold, build on to or subtract from. If you build your home from the foundation up, yes, you can create just the home you’ve always envisioned. However, you’ll definitely pay for that luxury.
Renovations can be used as a stepping stone to a future home sell. If the cost of renovations or upgrades will improve the value of your home in a future sell, then it might be the route to go. Particularly if you’re concerned by the aforementioned market conditions. Be sure to speak to a REALTOR from your local branch of Berkshire Hathaway HomeServices Stouffer Realty, who can present you with key data concerning properties similar to yours. This will give you give a good idea as to which components of your home could use the most love and care to ensure a good return on your investment. A pre-inspection is another good idea. This way you can address things that might later cause a hiccup in a sell, such as faulty or outdated wiring or plumbing, a low-efficiency HVAC system, or structural damage to the home. Curb appeal is super important, but so is infrastructure.
Making a choice between renovating and selling is never an easy one. Still, we hope the above has been helpful in influencing your future decision.
