Should You Remodel or Move?

By: M. Anthony Carr: RealtyTimes
Unless you've taken a new job in a new location, the decision to move up may involve deciding on whether to remodel or move altogether. Homeowners nationwide will spend $192.8 billion this year to either remodel or repair their homes, according to the U.S. Census.

The Remodeling Index, provided by National Association of Home Builders' Remodeling Council, determines minor alterations at $25,000 or below and major alterations above that amount. Where do you stand? Is it worth $25,000-plus to remodel or should you move up?

There are reasons in favor of both. Let's deal with the remodeling first.

    1. Your community is great, why move? For some homeowners they already live in
       the best community for their family and lifestyle. The schools are great,
       it's near their worship center, shopping and they are plugged in with
       neighbors and the community. So instead of moving, it might be best to expand
       or remodel.

    2. Sometimes, it's just time to upgrade the house -- even if you're planning on
       selling in the future. If you bought a home with 15-year-old appliances and
       décor, it may be time to switch them out, now that they are 20 or 25 years
       old. I always get frustrated with homeowners who want to remodel right before
       they move - they've never had the opportunity to enjoy the house they've just
       remodeled. Upgrades may include flooring, bathrooms, kitchen, exterior
       facelift, paint, curtains, furniture -- not just the house itself.

    3. It might be cheaper than selling. If you're needing more space, the remodel
       may actually be cheaper than selling, especially if you're looking at
       finishing or remodeling the basement. The basement remodel is the easiest and
       most affordable remodel available to homeowners because the exterior walls,
       plumbing and most electric may have already been run throughout.

    4. You're a do-it-yourselfer. Okay, you love those Old House, Fix-It or Nix-It,
       Saturday morning programs. Living in a dust-ridden environment with tools and
       power cords strewn throughout is your vision of heaven on earth. Go for it.

    5. You'll have to remodel the new house anyway. Most new homeowners spend
       upwards to 30 percent of the value of the new house they just bought fixing
       it up the way they want - so why move? Just spend that money where you are.

Now, there are just as many reasons to move instead of remodeling.

    1. The move could take less time and hassle. Depending on the condition of your
       local market, you may be able to list, sell and move in a shorter period of
       time than it would take to actually remodel your current home. Time is a
       major factor in our busy lives, and many times it would be quicker to just
       move.

    2. Remodeling would disrupt your lifestyle more than you're willing to deal
       with. You have to hire a designer, then a contractor, move furniture from one
       area to another in your house, find storage for the rest, live with dust,
       workmen, etc., for several months and then HOPE you like what you get at the
       end of it. Better to buy the house that's already finished the way you want
       it than betting on a finished product you're not sure about.

    3. You don't want the hassle of dealing with contractors in case they don't get
       it right. The challenge for remodelers is that they are being told by a
       remodeling-challenged homeowner what they want and then try to create that
       environment. If the homeowner doesn't like it at the end - it's very
       expensive to change once it's done.

    4. Remodeling could cost more than moving. For some people, to get what they
       really want, they would have to double their mortgage anyway - so it might
       be better to check out what's available in new construction or even in a move
       up in the community. Plus, builders in some markets are starting to offer
       free upgrades - including rec rooms, decks, and other add-ons that usually
       are the subject of a remodel job.

    5. Finally, you're family has enlarged. You just may need a larger home because
       you have more children or your parents/au pair/adult children have moved in
       with you.

When it's time to remodel, look over the local real estate market before making your final decision, it might be in your best interest to make that move instead of knocking down a wall.

Mr. Carr has covered real estate since 1989. He is the author of "Real Estate Investing Made Simple." Got a personal real estate issue? Questions can be posted at Anthony's blog.