Friday, November 25, 2005

Should You Remodel or Move?

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.

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.

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 d├ęcor, 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.

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.

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.

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.

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.

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.

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.

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.

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.

Published: November 11, 2005

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