Should You Renovate or Move?
Should you remodel or move? If your current home doesn't meet your needs, you've probably asked yourself this question.
This decision can be complex, and the correct answer depends on your budget, lifestyle preferences and size requirements.
There are various pros and cons to both renovating and moving. Considering the following factors can help you make the right decision for your circumstances.
Whether it's cheaper to renovate or move depends on your circumstances. Moving to a new house comes with various expenses:
- Real estate agent commission: Between 5% and 6% of the value of your existing home
- Title insurance: $1,000 on average, although costs can vary by area and the value of your new home
- Closing costs: Between 3% and 6% of what you borrowed for your existing home
- Home appraisals: Usually between $300 and $400, although fees can be significantly higher if you live in a city or have a large or unusual property
- Movers costs: Between $800 and $2,500 for a local move (within 100 miles), or between $2,200 and $5,700 for a long-distance move
It's also important to consider the condition of your existing home when tallying up the costs of moving. For example, you may need to pay for home repairs to get your home in a suitable condition to sell. Furthermore, you'll pay more over time if you take out a larger mortgage to buy your new home.
Meanwhile, HomeGuide says it typically costs between about $20,000 and $75,000 to renovate a three-bedroom home, rising to between $40,000 and $180,000 for a four-bedroom house.
However, you can get a more accurate idea by considering your home's square footage. Renovations usually cost between $15 and $60 per square foot for straightforward rooms, such as bedrooms and living rooms, while renovating kitchens and bathrooms can cost between $100 and $250 per square foot.
If you like your area, it's essential to consider whether moving to a new home will come with lifestyle compromises. For example, you may need to accept a longer commute, change jobs or move your children to a new school.
Many people find it difficult to leave a home where they've made many happy memories. On the other hand, moving may be more attractive if you're not keen on your current area or intend to move somewhere with better employment or educational opportunities.
Moving house and undergoing large-scale renovations can both be stressful options. If you don't want to spend an extended period living on a building site, moving could be the less disruptive option. Depending on the scope of your renovations, you may also need to find temporary accommodation.
Building a home addition can add much-needed space if your family has outgrown your current property. However, increasing your home's size isn't always possible, especially if you live in an apartment or can't get permission to make significant structural changes. Moving to a larger home may be a better option if you can't achieve the square footage or layout you want by renovating.
Building a new home is an alternative to renovating or moving. It's almost always cheaper to remodel your home than to build a new one because renovating gives you the option to keep some existing features while replacing others. Typically, building a new home costs around $150 per square foot — up to 10 times more than renovating.
Don't forget to factor in the cost of demolishing your existing home, usually between $6,000 and $20,000. Alternatively, you may choose to buy a lot to build on. How much a new lot costs can vary significantly by area and size. Overall, you can expect to spend around $300,000 to build a three-bedroom house from scratch on a lot you already own.
Another potential disadvantage of building a new house is that you're committed to completing the work as soon as you demolish your existing home. This could be a significant problem if your financial circumstances change midway or you end up going over budget. You can usually renovate a house room-by-room, giving you much more flexibility to react to the unexpected. You may also be able to stay in your home during renovations, while you'll need to find alternative accommodations when building a new house.
However, there are some situations where building a new house could be the better option. If it's impossible to achieve the layout and size you need by renovating, rebuilding could be the only way to achieve your required footprint. Rebuilding could also be more practical if you have foundation issues or want to raise the ceilings.
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