RENOVATE OR RELOCATE? 3 QUESTIONS TO HELP YOU DECIDE
Aug 03, 2023

Does your current home no longer serve your needs?


If so, you may be torn between relocating to a new home or renovating your existing one. This can be a difficult choice, and there’s a lot to consider—including potential costs, long-term financial implications, and quality of life. 


A major remodel can be a major commitment. From hiring contractors to selecting materials to managing a budget, it can take a tremendous amount of time and energy—not to mention the ordeal of living through construction or relocating to a temporary residence.



On the other hand, moving is notoriously taxing. In fact, in one survey, 40% of respondents viewed buying a new home as ”the most stressful event in modern life.”1

So which is the better option for you? Let’s take a closer look at some of the factors you should consider before you decide.

 

1. What Are Your Motivations for Making a Change?

It’s possible that some of the limitations of your current home can be addressed with a renovation, but others may require a move. 


Renovate

Certain issues, like dated kitchens and bathrooms, are fairly easy to remedy with a remodel—and the results can be dramatic. In many cases, a relatively minor renovation can significantly increase your enjoyment of your home. 


Other shortcomings can be more challenging to fix but are worth exploring so that you know your options. For example, if your home feels cramped or it lacks certain rooms, you might be able to make changes like installing an extra bathroom, adding a dedicated office, or finishing an attic or basement. You may even be able to build an accessory dwelling unit or extension to accommodate a multi-generational family. 


In fact, many Americans have remodeled their homes to meet changing needs since the start of the pandemic. According to the National Association of the Remodeling


Industry, 90% of their members reported increased demand for renovations starting in 2020, and 60% reported that the scale of remodeling projects has grown.


However, the feasibility and cost of these larger changes will depend on factors ranging from zoning and permitting to your home’s current layout. Speaking with an architect or a contractor can help you make an informed decision. Let us refer you to one of our trusted partners to ensure you receive the best possible service.


Relocate

Of course, sometimes, even rebuilding your home from the ground up wouldn’t solve the problem. For example, moving may be the only solution if you’ve switched jobs and now face a lengthy commute or if you need to live closer to an aging family member. 


Conversely, if the shift to remote work has opened up your location options, you may wish to seize the opportunity to relocate to a new locale. A 2022 study found that nearly five million Americans had already moved since the start of the COVID-19 pandemic due to increased flexibility from remote work, and nearly 19 million more were planning to move in the near future for the same reasons.3 


Moving may also be the best option, even when you’re happy with your geographic location. A local move may make sense if you’re looking for a larger backyard or significantly more space. Similarly, some frustrations—like living on a busy street or a long way from a grocery store—can’t be addressed with a renovation. We are well-versed in this area and can help you determine whether another neighborhood might suit you and your family better.

2. Which Option Makes the Most Financial Sense?

Renovating and relocating both come with costs, and it’s wise to explore the financial implications of each choice before you move forward.


Renovate

The costs of a renovation can vary widely, so it’s vital to get several estimates from contractors upfront to understand what it might take to achieve your dream home. 

Be sure to consider all of the potential expenditures, from materials and permits to updates to your electrical and plumbing systems. It’s also prudent to add 10-20% to your total budget to account for unexpected issues.4  If you plan to DIY all or part of your renovation, don’t forget to factor in the value of your time.


Renovations can also come with hidden expenses. These might include:

  • Additional home insurance
  • Short-term rental or hotel if you need to move out during the renovation
  • Storage unit for possessions that need to be out of the way
  • Dining out, laundry service, and other essentials if you can’t access appliances at home


Remodeling choices can also impact the long-term value of your home. Some projects may increase your home’s value enough to outweigh your investment, while others could actually hurt your home’s resale potential. 


For example, although you may enjoy the additional living space, garage conversions aren’t typically popular with buyers.5 Refinishing hardwood floors, on the other hand, brings an average return of 147% at resale.2  The specific impact of a renovation will depend on a number of factors, including the quality of work, choice of materials, and buyer preferences in your area. We can help you assess how a planned project is likely to affect the value of your home.


Relocate

The cost of a new home, of course, will vary significantly depending on the features you’re seeking. However, you may find that it’s cheaper to move to a home that has everything you want than it is to make major changes to your existing one. 


For example, adding a downstairs bedroom suite or opening up a closed floor plan could cost you more than it would to buy a home that already has those features. On the other hand, simpler changes and updates probably won’t outweigh the expense of a relocation.


If you’re considering a move, speak with a real estate agent early in the process. We can assess your current home’s value and estimate the price of a new home that meets your needs. This will help you set an appropriate budget and expectations. 


It’s important to remember that the cost of buying a new home doesn’t end with the purchase price. You’ll also need to account for additional expenditures, including closing and moving costs and the fees involved with selling your current home. And don’t forget to compare current mortgage rates to your existing one to understand how a different rate could impact your monthly payment. 



However, keep in mind that the interest rate on a mortgage is typically lower than the rate on other loan types—so you could pay less interest on a new home purchase than you would on remodel.6 We’re happy to refer you to a lending professional who can help you explore your financing options.

3. Which Option Will Be the Least Disruptive to Your Life?

A final—but critical—consideration is the time and hassle involved with each option since both renovating and relocating involve a significant amount of each.


Renovate

Don’t underestimate the time and effort involved in a large-scale renovation, even if you choose to hire a general contractor. You will still need to consider and make a number of decisions. For example, even a fairly basic kitchen remodel can involve a seemingly-endless selection of cabinets, tile, countertops, paint colors, fixtures, hardware, and appliances.


And don’t assume that you will get out of packing and unpacking if you stay in your current home. Most renovations—from kitchens to bathrooms to flooring replacement—require you to remove your belongings during the construction process.


The time frame for a remodel is another consideration. High demand for contractors and ongoing material shortages can mean a long wait to get started. And once the project is in progress, you can expect that it will take a couple of weeks to several months to complete.


Contemplate whether you will be able to live in your home while it’s being renovated and how that would impact your routine. For example, being without a functional kitchen for months can be frustrating, inconvenient, and expensive (since you’ll need to purchase prepared food). Remember that delays are inevitable with construction, and consider what additional challenges they could present. 


Relocate

Of course, finding a new home and selling your current one also takes a significant amount of time and energy. According to the National Association of Realtors’ 2022 Profile of Home Buyers and Sellers, the average buyer searched for 10 weeks and toured a median of five homes.


However, in many cases, the timeline can still be shorter than a major renovation. Once you find a home that works for you, it typically takes between 30 and 60 days to close if you’re taking on a mortgage—and the process is even faster if you’re paying with cash.9  Plus, you can look for your dream home without the inconvenience of living in a construction zone.


However, a move comes with its own stress and disruptions. If you’re selling your current home, you’ll need to prep it for the market and keep it ready and available for showings. Once you’ve found a place, the packing and moving process takes time and work, as does settling into a new home—especially if it’s in a different neighborhood. 


Fortunately, we are here to help make the moving process as easy as possible, if you choose to pursue that route. We can help you find a property that meets all your needs, sell your current one for top dollar, and refer you to some excellent moving companies that can help pack and transport your belongings.

 

WHATEVER YOU DECIDE, WE CAN HELP

The decision to renovate or relocate can be overwhelming—but this choice also presents a powerful opportunity to improve your quality of life.


There’s a lot to consider, from how renovations could impact your home’s resale value down the road to your neighborhood’s current market dynamics. We’re happy to help you think through your options. Get in touch for a free consultation!




The above references an opinion and is for informational purposes only. It is not intended to be financial, legal, or tax advice. Consult the appropriate professionals for advice regarding your individual needs.

 

Sources:

  1. HousingWire –
    https://www.housingwire.com/articles/46384-americans-say-buying-a-home-is-most-stressful-event-in-modern-life/
  2. National Association of the Remodeling Industry –
    https://cdn.nar.realtor//sites/default/files/documents/2022-remodeling-impact-report-04-19-2022.pdf?_gl=1*3pfs0m*_gcl_au*NTU2MDQ0MzAyLjE2ODMyMzgzMTY     
  3. Business Insider –
    https://www.businessinsider.com/5-million-people-moved-because-of-remote-work-since-2020-2022-3
  4. Forbes –
    https://www.forbes.com/home-improvement/contractor/home-renovation-costs/     
  5. U.S. News & World Report –
    https://realestate.usnews.com/real-estate/articles/10-home-renovations-that-can-decrease-the-value-of-your-home     
  6. Bankrate –
    https://www.bankrate.com/mortgages/mortgage-vs-home-equity-loan/#differences
  7. House Beautiful –
    https://www.housebeautiful.com/home-remodeling/a25588459/home-renovation-timeline/     
  8. National Association of Realtors –
    https://www.nar.realtor/research-and-statistics/research-reports/highlights-from-the-profile-of-home-buyers-and-sellers
  9. Forbes –
    https://www.forbes.com/advisor/mortgages/how-long-does-it-take-to-close-on-a-house/

HOW TO BECOME A HOMEOWNER ON A FIRST-TIME BUYER'S BUDGET

03 Aug, 2023
It’s not easy being a first-time homebuyer right now. At the end of last year, housing affordability hit an all-time low.1 Additionally, mortgage rates have risen significantly since 2021, while inventory remains tight for many property categories, but especially for starter homes. Even lower-priced condos are harder to snag these days, as investors and downsizers muscle out first-timers by offering stronger, often cash-heavy bids. In fact, according to the National Association of Realtors, only 26% of last year’s homebuyers were first-timers—the lowest share on record and down from 34% a year prior. This underscores just how steep a hill new buyers are facing.3 As a result, many first-time homebuyers are finding that they need to get creative or risk renting for longer than they planned. If you, too, are struggling to afford homeownership, here are some workarounds to consider as you plot your first home purchase. 1. Try House Hacking “House hacking” is a real estate investment strategy in which participants use their homes to generate income in order to offset their expenditures. For example, renting out a basement apartment or accessory dwelling unit (ADU)—such as a detached garage that’s been outfitted with a bathroom and small kitchen—counts as house hacking. So does splitting housing costs with a roommate or converting a part of your home into an Airbnb. House hacking isn’t new. But, it’s grown in popularity as a new crop of digital platforms has entered the market and made it easier than ever for homeowners to generate income from their property. In some cases, house hacking may make it possible for you to qualify for and afford your first home. A lender, for example, may approve you for a larger mortgage if you purchase a home with immediate income potential, such as a legal duplex or a property with a secondary suite that has a kitchen and full bathroom. In addition, house hacking could help you pay your mortgage once you move in. Here are just a few of the ways you could use your home to earn some extra cash: Offer paid parking in your driveway on a site like Spacer or SpotHero. Rent out your swimming pool for a few hours on Swimply. Make your home available for photoshoots or events on Giggster or Peerspace. Turn your backyard into a pay-by-the-hour dog park on Sniffspot. List your garage space on an app like Neighbor Storage. But before you make plans to house hack, make sure you fully understand an area’s laws and HOA rules. We can help you find a home with income potential in a neighborhood with less restrictive zoning and regulations. 2. Team Up With Friends or Family If you aren’t wild about the idea of welcoming strangers to your home, you may want to consider co-purchasing with a friend or family member instead. This unconventional housing arrangement is also growing more popular as friends and family members cope with higher living costs by pooling resources. According to the National Association of Realtors’ 2022 Profile of Home Buyers and Sellers, the share of first-time homebuyers living with people other than children or a romantic partner is currently at an all-time high. Meanwhile, research from Pew found that multigenerational living has accelerated especially quickly, with a quarter of U.S. adults aged 25 to 34 now living in a multigenerational home. Arrangements can be customized to fit your circumstances. For example, you could purchase a home and then rent a portion of it to a loved one. Or you might consider co-buying a home with friends or family members so that you can step onto the property ladder and start building equity together. Co-ownership could work out especially well for you long-term if it helps you to buy a home that’s bigger, has more investment potential, or is located in a high-demand area and so appreciates at a faster rate. Plus, you’ll get to see your loved ones more often and enjoy the coziness of shared living with people you like having around. On the other hand, sharing a big financial responsibility, like a mortgage, with friends or family could get messy—especially if you don’t create a clear-cut co-ownership agreement beforehand that outlines your mutual expectations. So plan carefully before you proceed. In addition, you may need to rethink the type of home you pursue. For example, a smaller home might be cheaper, but do you really want that much togetherness all the time?  We can help you set priorities and search for a suitable property.

STRESS-FREE HOME CLEANING: 27 PRACTICAL TACTICS FOR BUSY HOUSEHOLDS

03 Aug, 2023
Keeping a clean and orderly home is a challenge for many of us. Between busy work schedules, social obligations, and family commitments, it’s tough to keep up with daily chores—let alone larger seasonal tasks. The effort is worthwhile, however. A sanitary environment can keep you and your family healthier by minimizing your exposure to germs and allergens.1 Plus, researchers have found that organized, uncluttered homes have quantifiable mental health benefits, too, including reduced stress, improved emotional regulation, and increased productivity.2 The reality is, we enjoy our homes more when they are in good order. It’s much easier to relax without piles of unopened mail or a messy kitchen reminding us of work to be done. And don’t we all feel more inclined to entertain family and friends when our homes are well-kept? That’s why we’ve rounded up our favorite tactics—from overall strategies to little tips and tricks—for keeping things tidy without spending all our spare time cleaning. Set a Schedule for Daily and Weekly Cleaning We’ve all been there—you put off vacuuming or mopping your floor for a few days, only to realize that weeks have passed. Creating a cleaning schedule that works for you is the best way to stay on top of things and avoid overwhelm. Here are a few of our favorite strategies: Designate a day of the week for each task—then, add them to your calendar so you can’t forget. Create a shared schedule that assigns specific responsibilities to each member of the household. Post it in a prominent place, like on the refrigerator, or create a shared digital calendar. Carve out 15 minutes a day for cleaning and decluttering. Set a timer on your phone and get as much done as you can before it goes off.  It may take some trial and error to find the tactics that work best for you. The most important thing is to make a habit of cleaning so that clutter and grime don’t have a chance to build. And if you’d like some professional help, reach out for a referral to one of our favorite cleaning services!

NATIONAL REAL ESTATE MARKET UPDATE FOR 2023

26 Jul, 2023
There’s an old adage in real estate: location, location, location. But ever since the Federal Reserve began its series of inflation-fighting interest rate hikes last year, a new mantra has emerged: mortgage rates, mortgage rates, mortgage rates. Higher rates had the immediate impact of dampening homebuyer affordability and demand. But this year, we’re seeing further repercussions. While analysts expected listing inventory to swell as sales declined, instead, homeowners have been pushing off plans to sell because they feel beholden to their existing, lower mortgage rates. So what impact is this reduced demand and low supply environment having on home values? And what can we expect from the real estate market in the coming months and years? Here are several key indicators that help to paint a picture of the current market and where it’s likely headed.
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