Home Remodeling vs. New Home
The issue of home remodeling comes to almost every homeowner sooner or later. Should we fix up our existing home or purchase a new one? Unfortunately, the answer to this question isn't quite so simple. To help you think through the question, here are some factors to consider.
Will the cost of remodeling your home increase its value?
A basis question don't you think. For certain, the remodeling of your home will likely bring greater comfort, potentially more space, but one should analyze their investment in remodeling and determine whether or not it would be better to make an investment in a new home either pre-existing or new construction, or go forward with a major remodeling project. Whether or not the remodeling will return a positive return on investment will depend on a number of factors including:
- The type and cost of the renovation project
- Market valuation of your property
- Comparisons of homes in your area
Cost of the Renovation Project
What is the extent of the renovation project? Are you planning on simply sprucing up the living area, or is the project more extensive? For example, if your focus is on remodeling the kitchen, are you simply planning on replacing kitchen cabinets and counter tops? These renovation projects are often on the middle to lower end of the renovation investment spectrum. However, if you're planning on knocking out walls and adding additional living space, you need to closely investigate the investment and potential return associated with that investment. Ask yourself, how long do you plan to continue living in your home? Depending on the size and scope of the remodeling project, and years you plan to stay in your home, your remodeling project could result in either a positive or negative return on your investment when you get ready to sell your home. In essence, the size and scope of your renovation project depends on the following 3 issues:
- Home valuations of your surrounding neighbors.
- Type/style of construction in the neighborhood.
- Growth and vitality of the community.
Market Valuation of Your Property
Another consideration in assessing whether or not the cost of remodeling your home will or will not increase its value centers around the market value of the home in its particular area. In your area, are home values holding up or dropping? If the prices are increasing or holding steady, a renovation project may add value to your current home. However, if the home values in your area are declining, a renovation project may do little to add real value to your home. This is where a conversation with your realtor can be helpful. Your realtor has at their disposal assessment tools to complete a property valuation, provide a report on comparable sales within your area and provide some guidance based on trends and current market activity.
Home Comparisons Within Your Area
Finally, as you consider the prospects of remodeling your home, you should ask yourself just how your home renovation project will fit with the other homes in your neighborhood. In some cases, expanding the physical structure of your home will fit well with the surrounding homes, but it may not. Once again, similar to assessing your home valuation, you will want to speak with a trusted realtor that has had extensive experience in working with sellers and home buyers in your neighborhood. An experienced realtor will be able to provide you with wise counsel on your planned home renovation project to help you make the right financial decision for you.
There are many considerations that go into deciding whether or not to pursue a home renovation project. The thoughts shared here will get you started in the right direction. However, to determine the right direction to either undertake a major home renovation project, or consider moving into a new home, you'll want to talk with a trusted and experienced realtor. Christine Mastis has years of experience in helping people work through the maze of questions surrounding home renovation, and would welcome the opportunity to help you through the process. Give Christine a call!
Contact Us to help you in making your decision on home renovation.