Should I Move or Remodel?
by David Lefkovits, www.LefkoRenovations.com
One of our most basic needs is to provide a roof over our heads. But for many of us, our home goes way beyond satisfying our need for shelter. It is our sanctuary from the outside world. It is a place to entertain our friends and family. It is the safest place to enjoy family life. Our needs are transformed as our family evolves and our economic situation changes. As time goes by, we seek to enhance the quality and enjoyment of our family life.
Today’s market reality can make it difficult for families to move in order to meet these changing needs. Selling an existing home can present some significant challenges. Renovating your home may be the most cost-effective and viable option rather than selling, taking a big loss and making a substantial down payment on a new home. These historically low interest rates have been a great opportunity for many to refinance their home with a construction loan and fund their remodeling project.
Remodeling projects that conserve the greatest value in today’s market are those that add livable space. Many times this can be achieved by finishing a basement or an attic or enclosing a porch. In other instances, it may be necessary to make an addition to the rear or side or to possibly add another floor. The two main investment considerations when evaluating your move-vs.-remodel decision are:
- Capital Investment – comparing and understanding the tradeoffs between: a. Cost to remodel your existing home and get it to the level you want and need vs. b. Cost of selling your existing home (for a gain or a loss) + the capital to purchase another home (down payment) + your moving and storage costs + temporary housing costs + repairs or renovations required in the new home
- Emotional Investment – this refers to the level of attachment to your existing neighborhood, neighbors, school district (if you have kids that go to the public school system), proximity to work and local amenities. There are also great deals to be found in today’s market… Distressed opportunities such as REOs, foreclosures and fire sales can also make it attractive to buy, remodel and move…
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