Renovate or Sell?
Here's How to Decide
Renovate or sell?
It’s a question of choosing to improve what's familiar versus exploring what could take you in a new direction. It’s also a question of finances.
If you’re deciding whether to renovate or sell your home, there are a few major factors to consider:
- Cost
- Current real estate market
- How long you’re willing to wait for your “perfect” home
- Timing and life changes
Renovations typically have more immediate expenses, however, you may have a low-interest rate on your mortgage that makes the argument to keep your current home.
Selling your home in a low inventory market should yield a strong price, but that revenue may be a wash if you need to pay top dollar for your new residence.
Assessing your lifestyle needs, talking to a Realtor, and going over your options with a residential construction company can help you make this decision.
How to Decide Whether to Renovate or Sell Your Home
There are a few essential factors to consider when making this decision:
Cost
Whether this is an out-of-pocket expense or a project you’d like to finance, cost is a huge factor to consider when you’re deciding if it’s better to renovate or sell. You will need to identify your budget, and understand financing options such as home equity lines of credit or construction loans.
Renovations have more immediate costs than moving that can stack up quickly. Depending on what room you’re renovating, you could end up spending over $100,000.
For example, the average bathroom remodel costs between $30,000-$50,000, but a bedroom addition can cost as much as $57,000. Costs vary based on whether you’re doing a remodel or adding an entirely new room to your home.
Above all, renovations aren’t just about design, often they are the correct moment to repair structural issues or upgrade systems such as plumbing and electric. Once you start opening walls, you may find more issues to fix than you anticipated.
Moving might seem like a more economical option, but there may be new costs to consider in your next residence. You’ll have to factor in how much it will cost to maintain a lawn, repaint, or pay for utilities in a bigger house. Moving costs are much more than simply the hours spent putting your belongings on a truck.
Current Real Estate Market
If you’re leaning toward selling, research the current real estate market first.
Even if you can get a solid price for your current home, make sure you don’t move into an area where there’s no chance for your new investment to grow, or worse, that it’s likely to decrease in value.
In addition, find out:
- The inventory for single-family homes
- How long it’s taking to sell homes in your area
- The mortgage interest rate for which you qualify
Hiring a Realtor will give you easy access to this data. Realtors will be able to go over all your options and forecast potential trends in new communities you may be considering. If you are thinking about relocating out-of-state, a great Realtor will be able to manage the sale of your house and work in conjunction with a second Realtor in your new community to make the big move run smoothly.
By consulting a professional, you’ll be able to evaluate how profitable a move would be and whether you’ll eventually earn back the initial costs of moving with your new home investment.
Determine How Long You're Willing to Wait for Your "Perfect" Home
Most people don’t realize that remodeling and renovations can take a long time to complete. They’ve probably seen a few too many HGTV shows that convince you it can be done in a matter of weeks.
Do you need to make changes to your home right now or could you wait a year or more?
Renovations can take anywhere from 6 months to 18 months.
If you have a lot of available inventory in the area that fits your needs, moving could be best.
If you’re not in a rush for a new house, renovation may be the best option.
Timing and Life Changes
Renovating and relocating have different types of costs, so it depends on where you’re hoping to save.
If you are ok with immediate out of pocket costs, renovation could be strategic for you in the long run.
If you would rather defer costs and want to minimize expenses right now, then selling is likely a better option.
Moving could be worth it if your current house needs a lot of major changes to be a good fit for you.
How to Evaluate the Risks of Remodeling or Moving
Make A List
Have you ever watched Love It or List It?
We recommend making a list, too.
Write down every feature that would make your home better, from a bigger bathroom to a different location.
Divide that list up into two columns: Moving and Renovating. Then, put each item under whichever label would make it more possible for you (ex. Bigger bathroom could go under “moving” and “renovating,” but location would just go under “moving”).
If you end up with more items under “moving,” then it might be time to sell your house.
Talk To A Realtor
When you have your list of home must-haves, go to a Realtor. They’ll be able to research what type of homes are available and whether your budget will be able to deliver what’s on your list.
They can also give you a rundown of the real estate market. Realtors can tell you if it’s a “buyer’s market” or a “seller’s market” and give you an idea of how long finding your ideal home could take.
Talking to a Realtor can also help you understand what you need to budget for to buy a new house. They can help you set realistic financial expectations.
Talk To A Construction Company
Having a consultation with a residential construction company will help you determine if renovating is a better option for you.
They’ll be able to tell you how long a renovation can take, whether you’ll have to live somewhere else while renovations are being completed, and how much changes to your house will cost.
Renovate or Sell? Only You Can Decide
It’s important to take a strategic approach to this question.
Weigh out the pros and cons of renovating or selling, and be sure to talk to relevant professionals in your area.
At guerilla, we can help you look at this decision from both the real estate and construction perspective. Schedule a free consultation today to chat about which option may be right for you.
