Remodeling or purchasing a new home – which is best?

Remodeling or purchasing a new home, which is betterBecoming a first-time homeowner is an achievement and a feeling you won’t forget. However, there comes a point when you might consider relocating to a better, bigger, and more spacious home. However, going bigger doesn’t always imply that you have to move out; therefore, the question of whether you should remodel or purchase a new home arises.

We know that everyone is different in terms of their needs and preferences, and there isn’t a right or wrong answer. Some homeowners might be better off remodeling their current home, while others would be better off moving out. For some people, the financial implication of relocating might weigh more than other aspects, while location is an essential factor for others. So to rephrase the question, which solution is best for you? 

We are about to line up some of the pros and cons, the bumps and roadblocks that might come along the way during the remodeling and home purchase process. Hopefully, in the end, you will better understand the process, and it will let you decide which solution best suits you. Should you remodel or purchase a new home? Let’s find out!

Things to consider before making a decision

Both remodeling and moving can be stressful and will take time, energy, and money to complete. What if you don’t have the budget for a new home? Wouldn’t remodeling your existing home serve you better? How can you determine which solution suits you best? We are about to address some of the questions that might come to mind when you plan such a significant move, and hopefully, we can answer them.

  • Is location relevant? More often than not, people love the neighborhood they are in. Relocating to another community raises the question of whether you will like it just as much as the previous neighborhood. In that case, you might be more inclined to renovate your home or buy one in the same community.
  • Is it cheaper to renovate or to move? One of the significant factors in the remodeling vs. home purchase dilemma is the cost. Remember that a home remodeling project requires out-of-pocket costs immediately, whereas moving might initially put some money in your pocket but bring about unexpected expenses down the line.  It's important to factor in things like renting a moving truck, buying new furniture, and additional miscellaneous costs when having to move.
  • Is it a good time to buy and sell real estate? If you decide to sell your property and buy a new home, you have to consider the local real estate market as well as the one you are planning to move into. You want to get the most out of your investment, and even if it might be cheaper to move than to renovate, you have to consider that housing trends may shift quickly. You don’t want to buy an overpriced home or have an appraiser undervalue your property because it’s an unfavorable time to sell.
  • Is there an emotional attachment to the home? This is also a big one for many people who are thinking about relocating. Many memories were created in that home, and it’s hard to detach yourself and let it go. Consider the emotional implications of relocating and the impact it’s going to have on you and your family. 
  • What are your long-term goals for the home? If your long-term goals don’t revolve around the house, you would probably be better off not remodeling your home. For example, if you want to have a big family and live in a two-bedroom house, you might need to move sooner or later. Expanding your current home will drastically increase the costs if you are changing the floor plan, so you might be better off relocating.

The pros and cons of remodeling or buying a new home

Hopefully, you could address some of the questions above and determine your stance on the situation. However, you must be aware that renovating and relocating have pros and cons. We want to highlight some of them and let you decide which solution fits best for you.

Relocation pros 

  1. Relocating is not easy, but it has its fair share of pros, and one of them is that you are purchasing a home and a new investment. Many people who relocate see it as an opportunity to expand their portfolio if they have equity on their side. Maybe your current assets are no longer affordable, and you are thinking about downsizing to alleviate financial strains or kick outstanding debts. This might be the shot you are looking for.
  2. Relocating means a new beginning, and while many might argue that new beginnings are not necessarily a pro, how else are you going to know if the grass is greener on a new lawn? A change of perspective might be exactly what you need to expand your horizon and improve at a personal and social level.
  3. You are no longer a first-time homebuyer, and since you’ve been there before, it is a lot easier now to go through the paperwork and the purchase process. Find a real estate agent who can assist you with taxes, insurance, and title and find a quality lender to buy the new house. It is a big step, but you’ve been there before on your first home purchase, and you won’t be so stressed out about what will happen since you are already familiar with the process. 

Relocation cons

  1. Relocating has its fair share of downsides, and one of them has to be the moving part. Having to pack everything up and move all your belongings to the new home is not something anyone can say they enjoy doing. Even if you don’t do it yourself, you still have to pay moving costs to have someone else do it for you.
  2. Even though you are more comfortable with the process of home buying, moving is a stressful life event nonetheless. Six out of ten people find moving to be one of the most stressful things to do, beating out even other stressful situations such as break up or divorce. Take it into consideration before deciding to proceed on this route since things can get quite bumpy down the road, especially if you have a family.
  3. You are no longer a first-time home buyer, but keep in mind that you might be a first-time home seller. Selling the home could take quite a while if you are located in a buyer’s market, and the selling price might be lower than you think. Also, selling your home involves paying your real estate agent and some other fees. The selling process can be complicated and expensive, so you have to be willing to go through it to relocate unless you want to use the second home as a passive income strategy.

Remodeling pros

  1. Remodeling allows for more financial flexibility because you are not forced to remodel everything in one go, and you can plan ahead based on your current budget. You can split the project into chunks and complete parts of it throughout the year. You don’t need to remodel everything in your home, which means your budget can flow with what you need to do.
  2. A personal touch is probably one of the most significant incentives to choose to remodel over relocating. With a renovation, you can change your home according to your desires and expectations. Buying a new home might provide you with only a few of the features you want, and then you would have to invest even further to turn it into your dream home. Moreover, you can save money on your renovations to achieve your desired home features without paying a fortune.
  3.  You can increase your home value with renovations, and if, for some reason, you decide to sell it further down the road, you are looking at a home with an increased market value. If your remodeling project targets bathrooms and the kitchen, you look at quite a significant value appreciation since those are the rooms that sell the home. If you have a lot of home equity, you can use your home as collateral to borrow against its value and pay for the renovation, so it’s a win for everyone.

Renovation cons

  1. During the remodeling process, the last thing you want is surprise expenses, and it happens more often than not. This is especially true for large-scale projects that might involve tearing down walls, moving plumbing, and so forth. Unfortunately, surprise expenses will cause a surge in your remodeling budget, which is not a pleasant thing to have.
  2. Remodeling means that your home will be a construction site for a few days or weeks, depending on the project's size. Some remodeling projects might still allow you to live in your house in a separate room until the renovation is complete, but others might require you to move out for a few days, which might come with some extra costs for accommodations. It will be stressful and loud until the project is finished, and you need to have patience.
  3. The quality of the work performed may not meet your standards. This can be one of the most frustrating aspects of renovations. You have now spent a large sum of money and have part of your house seem worse than I was to start.

Conclusion

As a homeowner, there comes a time when you have to undergo a remodeling project or consider relocating. However, for many people, the two overlap, and you have to decide whether you are willing to move into a new home or remodel the current one. If that is the case, then we have underlined some of the pros and cons, along with a series of questions that will hopefully help you decide on remodeling your home or relocating.

If you enjoy this content, make sure to share it on your social media platforms and let your friends know which is best - remodeling or purchasing a new home.

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