Sometimes, the home you once thought was perfect no longer matches your wants or needs. If your current home just isn’t working, you have a choice. You can either renovate, or sell and move. In this post, we’ll explore these two options and the things you’ll want to consider before making a final decision.

Top reasons to upgrade your home

A survey of American homeowners in 2021 found that these were the top five reasons people were looking to move, or remodel their current home:

• Want more outdoor living space
• Need a home office
• Would like a multi-function flexible entertaining space
• Wish to add an au pair or in-law suite
• Require a dedicated exercise room

Big or small?

The first thing to consider is how big of a renovation you want. Be honest with yourself about everything you’d need to upgrade to guarantee you’d be happy staying in your current home. Finishing off the basement for more living space isn’t the same as adding an extra floor or completely gutting your main floor and knocking out support walls to change the layout. Make a list of must-haves so that you can price out the right renovation for your needs and determine how disruptive and time-consuming the work would be.

A location to love

If you love where you live and would prefer to not change locations, you can research the local housing market for homes that match your new needs. If there’s no good match and you don’t want to move out of the area, then renovating will most likely be your best bet.

Accessing capital

A major home renovation will cost a lot of money to complete. The good news is that home equity in America right now is at a record high, making it possible to finance your entire renovation using the equity you already have in your home. On the other hand, this same equity could be leveraged to purchase a new house on the open market that already suits your new needs.

To determine which choice makes more financial sense, you’ll need to get several estimates for the cost of renovating and find at least one available home on the market that you consider to be comparable to your current home post-renovation.

By working with a real estate agent to estimate the market value of your current home and a mortgage broker to estimate the cost of cash-out refinancing, getting a home equity loan or purchasing a new home, you can get ballpark figures for how much each option will cost.

Balancing dollars with sense

Of course, the decision isn’t just about money. Maybe you love your neighbors or your kids don’t want to change schools. Or perhaps you’re busy professionals who work from home and can’t imagine having contractors sawing and hammering away for months on end. The right choice for your situation might not be the cheapest option.

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