If there’s one thing many homeowners have had a taste of as a result of the coronavirus outbreak and resulting lockdown regulations, it’s that loving the space you live in is key. Numerous homeowners have used this time to upgrade or renovate their properties, or to finally pay attention to repairs that have been a long time coming.
With this, many property owners may also have become to the acute realisation of just what work around the home costs – and it isn’t always cheap!
With that being said, some people may be wondering whether it’s really worth paying all the money required for a remodel, or if finding a property that already ticks all their boxes is the better route for them.
Is one option necessarily all that much more affordable than the other? Are you even really in the mood to move? This article aims to make the decision a little easier.
Determine whether remodeling or moving is more cost-effective
If you’re an average Joe and not a property mogul that deals with these issues often, you’ll probably be looking at dollars and pennies when making the decision between renovating and remodelling, or selling the property to acquire another.
The costs associated with each of these options will probably tip the scales in the favour of the better option for you as an individual homeowner and possible seller.
In this regard, it is important to note that there is no right or wrong answer – a homeowner’s individual financial and other circumstances will have a definite hand in what will be the best option for them, personally.
In comparing apples with apples, it is cardinal to look at the individual financial breakdown of each of the two options.
Costs of selling
Even if home sellers mostly stand to make a profit on the sale of their property, this is definitely not always the case. In addition, many prospective home sellers also forget to keep all the additional costs associated with the sale of the property in mind.
These include things like the commission a real estate agent is paid after the sale of the property has been completed (paying agent’s commission is non-negotiable, although the amount of commission paid to a real estate agent may be negotiated with the agent in advance – but beware, you always get what you’re paying for!), the cost of the new home, moving costs and the costs associated with repairs and maintenance to the property that is being sold.
Costs of remodeling
When taking a look at the costs required to remodel a property, property owners often forget just what is paid for when renovating. Aside from the cost of the materials used for remodelling, homeowners also have to think of the amount charged by contractors for the labour associated with the remodelling, as well as permits and architectural plans, which may be required by law for larger renovations.
If a homeowner does not have the cash needed to undertake the remodelling at the ready, they will also have to consider how these will be financed. If a homeowner decides to take out a second mortgage or other loan to pay for renovations to their current property, there will obviously be additional costs that they might not have thought of initially.
Research your real estate market
The current state of the real estate market in the city or suburb your property is located in will definitely influence the decision to sell or remodel. If your local market favours sellers, it might be in your favour to consider selling while there is a chance of making a large profit.
With that being said, the state of your property will also have a hand in the price your home ultimately fetches. Comparable properties or “comps”, as the real estate gurus call them, will to a large extent dictate what you’ll be likely to sell for once the property is picked up.
Also, comparable properties will give you a good idea of what repairs and renovations will yield the largest return on investment, whether you decide to do them now and sell later, or whether you sell the property as is. Let your real estate agent advise you on what the local property market is doing, and how well your property is likely to fare when competing with other, similar properties in your area.
Evaluate your emotional attachment to the community
A nice suburb is a godsend – and it is very regularly the suburb that home sellers miss more than the house itself. It’s worth asking yourself how emotionally attached you are to the suburb and community you currently live in. Also take into account the current benefits your city or suburb offers in terms of its proximity to amenities like schools, shopping centres, your place of work, restaurants and parks.
If you find you are completely happy in the suburb you’re currently living in, and remodelling doesn’t cost the equivalent of a new home, you might be much better off sticking around where you are.
Consider your timeline needs, whether you want to move or improve
Patience is certainly a virtue, regardless of whether you’re thinking of remodelling or selling. If you’re thinking of moving, the timeline will be determined by how long the average comparable property spends on the market in your city or suburb – your real estate agent will be able to give you advice here, although fluctuations in the property market may also have an influence.
Similarly, finally pushing through a sale may also take some time, as may essential repairs to the property that might be necessary before the property even goes on the market.
On the other hand, anyone that has ever had extensive renovations done to their property knows that there is also significant patience required if this is the option you go for. While contractors will always give you an expected timeline of how long remodelling the home is likely to take, delays or changes to initial plans could mean that this takes longer than you might have initially expected.
In the end, it all boils down to how the timelines associated with the sale or remodelling of the home compare to the timeline you have set, considering your own personal and/or professional goals.
Be realistic about what a renovation will solve
Look, remodelling your home can fix many niggling issues, but it definitely won’t sort out all the things that might be bothering you about your current home. For example, renovations won’t turn a small property into one that can suddenly accommodate a growing family. Remodelling won’t do anything about your noisy neighbours, nor will it magically move your kids’ school closer or make your commute to work an hour shorter.
If these are problems that have made you think of moving, moving to a different property might be exactly what you need to do. Even if remodelling will make your property more comfortable to live in, they mean precious little if they’re not also adding to the value of your home when you do eventually sell it.
Many homeowners are torn between the decision of improving their current property by undertaking extensive remodelling, or instead looking for a property that meets all their requirements from the get-go.
Each of these options comes with its own associated costs, and these will help homeowners to decide which option is the right one for them, taking into consideration their current financial means, their financial goals, and the plans they have for the future.
Should a homeowner decide to remodel, they must remember to take a good, hard look at just what the costs associated with renovations will be, not forgetting to consider things like the cost of labour, and architectural plans or permits. If they decide to sell, it pays to take heed of the many hidden costs that are part and parcel of the home-buying process.
Another important consideration is the timeline associated with each option, and how neatly this lines up with the homeowners own plans, ambitions and needs. Regardless of whether they want to sell and move or renovate, a certain amount of patience will be necessary on the homeowner’s behalf. Even so, there are things that renovating simply won’t fix, and these will inevitably also have an influence on what decision is made.
If you have settled on selling your property and finding another, you simply can’t disregard the importance of a good real estate agent to help you sell – this is even truer in trying economic circumstances.
Perfect Agent can recommend a number of agents that meet your exact requirements and understand what you are looking for, while still placing a high wager on making a good profit on your current property. Not sure where to start looking for qualified and experienced agents? Perfect Agent has the right property expert for your needs.