After the first time, home purchase excitement fades and “home ownership” – the cost of upkeep and other associated expenses – arrives, a day might come where you find yourself considering if it’s better to renovate or go for selling your home and purchasing another.
Every decision, of course, has pros and cons. Here are some to consider for both scenarios. After all, your home sweet home might actually be where you are – with some updates and improvements or it might be in a totally new place.
The advantage here is that you could spend less than opting for new digs because you can improve the parts that need the help. Can’t afford a total kitchen makeover? Perhaps the budget can swing updated shelving and repainting of the master bedroom. Customization is key. Improvements can take place over time making it a more cost effective approach. You might achieve the same desired outcome – a home that does what you need and is welcoming – without costing hundreds of thousands of dollars.
If the home needs a total “re-do” financing comes into play – tapping into your equity too soon can make it more challenging to get another mortgage in the future. Another challenge to consider is the actual remodeling itself – whether done by you or hired professional, there’s going to be the clutter and chaos during the actual work. Some homeowners can deal while others may opt for a hotel but the hotel route costs money and that’s another consideration.
Starting over in a new place doesn’t have to mean moving far away. It comes with new people, a new neighborhood and it might even allow you to meet a goal like downsizing. The whole purchase and financing aspect and the paperwork is a more familiar process once you’ve bought the first home. Income taxes are a consideration. Some states have a capital gains exemption.
The challenges of buying a new place include many required costs such as realtor fees, inspection fees, etc. If the idea of actually sorting through your stuff to make the move makes you think “absolutely no way” consider that as well. Another stressor could be the time factor between closing and actually moving.
The decision to renovate or relocate is multifaceted and each homeowner’s situation is unique. You can start working toward an answer that’s right for you by considering the benefits and challenges both contain.