Although spring officially arrived on March 20th, now that it’s May, we truly begin to see signs of spring popping up out of the ground. It’s also time for the home improvement season to begin. With that in mind, let’s look at the age-old question many homeowners ask themselves: “Am I better off to move or improve?”
If you’ve given thought to this “move or improve” dilemma, answering these four primary questions should help determine the best answer for you. Homeowners who are happy with their current neighborhood and school district (usually the top two owner priorities) are wise to weigh answers to the following:
1.How long do you intend to keep the house?
It makes little financial sense to pour money into a house only to sell it. If you’ve ever lived through a remodeling project, then you know that the emotional upheaval you suffer during construction needs to be offset by enjoying the benefits once the improvements are complete.
2.Will you be able to recoup the cost of improvements when you sell?
Just because you pour $50,000 into the cost of a home improvement doesn’t mean your home is worth $50,000 more. Exactly how much of your investment you’ll recoup depends on several factors, including the direction of the broader housing market, the value of the homes in your neighborhood, when you plan to sell the home and the nature of the project itself. However, if you plan to stay put for ten years or more, and the improvements make your home ideal for your needs, then the question of recouping the costs may carry less weight. An excellent source for weighing the cost vs value found in remodeling projects, by region, can be found at this website: https://www.remodeling.hw.net/cost-vs-value/2017/
3.Given the age, size and location of your home, would the improvement be considered “logical?”
Making expensive additions to a house that’s full of functional obsolescence makes little financial sense. Many appraisers would tell you that it’s much tougher to recoup the investment from home improvements if they aren’t similar in style and design/era to the existing home.
4.Could any additions/changes over-improve the house?
There are no hard and fast rules, but overall it is best to not have the most expensive home on the street or in the area, either from added square footage, extreme remodeling or using materials that are too expensive for the neighborhood. It is even worse if yours is the most expensive real estate by a wide margin.
Still not sure what to do? These four questions may not provide a clear- cut answer to your question, but they should serve as a starting point to get you focused on the real estate issues that are most important to you in the immediate as well as in the long-range future. For many home-owners pondering these same questions, an in-depth look at current market conditions is helpful in making smart and informed decisions. If you’d care to know more about our local market, let’s talk.