Growing Pains: Should You Add On or Move Out?
Written by: Lankarge/Nahorney for HomeInsight
Is your family growing? Are you feeling squeezed in your home? Are you considering adding on or renovating?
You're not alone. Home renovations have become the new national pastime, as homeowners have made both Home Depot and Lowe's into Fortune 500 companies at number 13 and 50, respectively. But if you're considering a major home renovation you may want to do a little research before spending $10,000, $20,000, $50,000, or more.
Given that the average homeowner moves about every seven years, you should be concerned about the resale value of your home. It's best to do some research about whether you should add on or whether you'd be better off moving to a home that may already have the features and extra room that you desire.
For starters you can check the value of homes in your area, while also taking a peek at recent home sales. But in order to determine whether you may be over-improving your home to a point where it might be more cost effective move, you may want to contact a real estate agent. A quality agent can provide you with up-to-date market data so that can help you to determine what additional square footage might be worth on your home, or what a renovated kitchen or bathroom might add to the value of your home.
You'll also want to figure out whether you'll get a large percentage of your investment from the renovation back in the form of increased home value. The agent can also help you with that. For example, you might learn that all of the colonial-style houses in your neighborhood have four bedrooms and 2 1/2 baths. Your three-bedroom, 1 1/2 bath colonial could rapidly increase in value with the addition of a master suite - adding that fourth bedroom and extra full bath. But, on the other hand, if you already have the fourth bedroom and 2 1/2 baths, adding a fifth bedroom could provide you with a low return on your investment.
There are also other reasons why you might want to consider moving - or not. Some of these reasons are:
Quiz: Assess Your Home's Repair Needs
Survey your home and rate the items listed below with the following scale: 1 = immediate need, needs replacement now; 2 = needs replacement/repair within two years; 3 = fine as is; or 4 = excellent condition, rate the following in your home:
Now, add up all your points. How did you do? If you scored 15 or less, your home is in need of some costly repairs now; if you scored between 16 and 22, you need some work over the next few years; between 23 and 31, less work, but some that could be costly; and above 31, you're currently in great shape.
What do you do with this information? Get average prices of what it will cost you to repair or replace the areas that need work. Add them to the cost of your proposed renovation project. Then work with a real estate agent to see if it makes more sense to stay in your current residence or make a move.
Adding on or moving out is a tough decision that combines emotion with cold hard facts. Over-improving your home will cost you eventually. But costs to move must also be factored in. Those costs are not limited to hiring movers and getting new return address labels, but can also include such things as window treatments, new furniture, decorations, wallpapering, painting, rugs, and lighting.
Take your time making your - it is one of the biggest decisions you'll ever make. For more information, see Adding On Instead of Moving Out and Remodel or Move: Does It Make More Sense to Stay or Go?
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