The realization happens slowly over coffee or a lazy weekend: your house no longer fits your needs. After that comes the question—should you stay or go?
The decision to remodel or buy new isn’t as simple as it once was. Before the 2007 financial crisis, the American dream was planted firmly at the crossroads of real estate and property ownership. Historically, American homeowners were obsessed with the idea of “moving up”—i.e. purchasing a home and living in it for a few years before selling it for a profit. Think about the many reality TV shows that glorify the highs and lows of the real estate business.
When the recession hit, however, the risk and reward system of the housing market crashed, with many people having to foreclose on their homes and retreat back to rentals. What we learned from that dizzying financial crisis was to tread lightly into the real estate market; these dramas are cyclical. It is important to have a broad view of the economy before entering its game of chutes and ladders.
The Costs and Benefits of Buying New
Perhaps it’s time for a change of view. Maybe the children have grown up and moved on, or maybe you don’t want to deal with the stresses and upheaval of a renovation. In these cases, buying new may seem like an attractive option.
But buying new is an expensive, multi-year commitment of time and effort. New construction can cost much more than similar existing homes, up to 20% or more. While new homes are built for modern convenience—with updated appliances and materials that may lower maintenance and utility costs—they’re often pricier. All those fabulous amenities can really add up, and more often than not, new construction comes in the form of planned developments that forfeit personality for mass construction. New housing developments lack the charming architectural details of older homes and typically offer smaller outdoor spaces than you find in established communities of older homes.
How to Assess Your Options: Financial and Emotional Angles
The best place for homeowners to begin their financial evaluation is with their neighborhood. Where you live is the greatest predictive factor of profit. As any real estate agent will tell you, “Location, location, location.” If you live in a viable neighborhood, then a renovation may be the best option. Bringing your home up to neighborhood standards is a foolproof strategy for financial success.
Be careful, though. Many communities place a limit on how big a house can be in relation to the property’s size. If you are looking for a huge increase in living space, this may be a limiting factor. Other than that, the cost of renovation will rely on the age of your structure.
It should be noted, however, that remodeling is far cheaper than buying new when you consider the retail price of a home in terms of square footage. Prices can vary widely with the aspirations of your home renovation. The bright side of this is that you have the ability to customize a space you are already comfortable in.
On the emotional side of things, remodeling allows you to stay put in a house that truly feels like a home. Bonds made in a close-knit neighborhood can’t be replicated just anywhere, and re-establishing routines like grocery shopping and school carpools isn’t fun. By choosing to renovate, you cultivate comfort and stability while optimizing a space you already know.
Besides, new construction carries high transaction costs that conceal unpredictable quirks in your new construction that may require immediate upgrades or fixes. A fresh start may be enticing but the harried logistics of a move can often cause more headaches than they are worth.
The Choice to Renovate
Big or small, renovations require research. Once you have decided to remodel, the search is on for the perfect contractor who can bring the right materials and technology to your house.
Time is also a major factor. Any type of remodeling will require construction workers. Having these professionals in your personal space requires trust and foresight. If you have a major renovation plan in mind, it may take months. However, a smart contractor can minimize your timeline and how invasive remodeling can be.
If your ultimate goal is comfort and energy efficiency, remodeling can be a matter of days instead of weeks or months. These simple upgrades can transform your home just as much as a kitchen renovation can, but at a fraction of the cost. Plus, energy efficiency design is adaptable to your needs and the structure of your house. Any technological upgrades you desire, are installed with care and preservation in mind.