Growing Pains: Should You Add On or Move Out?
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, putting Home Depot and Lowe’s in the top 50 of the Fortune 500 companies.
The average homeowner moves about every seven years, so thinking about the resale value of your home makes sense. If you’re considering a major home renovation, do a little research before spending $10,000, $20,000, $50,000 or more. And consider whether you should add on or move to a home that already has the features you desire.
For starters, you can check the value of homes in your area and take a peek at recent home sales. To determine whether you’re over-improving your home to a point where it’s more cost effective to move, contact a real estate agent. A quality agent can provide you with up-to-date market data to establish what additional square footage might be worth to your home. Or what value can be added by renovating a kitchen or bathroom.
A qualified agent can help you determine what percentage of your renovation investment you can expect back as increased home value. For example, you might learn that every colonial-style house in your neighborhood has four bedrooms and 2 ½ baths. Your three-bedroom, 1 ½ bath colonial could rapidly increase in value with the addition of a master suite – accomplishing that fourth bedroom and extra full bath. On the other hand, if you already have the fourth bedroom and 2 ½ baths, adding a fifth bedroom could mean a low return on your investment.
There are many reasons to consider moving - or not. Some of these reasons are:
- Family. To be closer to or further from.
- Schools. Your children might be established and you don’t want to move them.
- Neighbors. Your neighbors can make or break the neighborhood. If you have close friends nearby you’ll be less likely to move. If your neighbors have loud parties and park cars on the lawn, you might consider packing your bags.
- How much work you’ve done to your house. Homeowners who have put in a lot of sweat equity are less likely to move because they are deeply emotionally invested.
- Proximity to local amenities. Whether it is walking to the school, library, park, or being just a few miles from the shopping mall, you’ve heard it many times: the three most important things in real estate are location, location, location. Some people want to be in the middle of everything – others want to be away from it all.
After you tackle the five reasons why you may or may not want to move, take a critical look at your home with a long-term view at what it will cost you to stay. That means walking around your home to see what kind of shape it is in – especially paying attention to the items that are costly to repair.
Quiz: Assess Your Home’s Repair Needs
With 1 being an 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:
|► Roof||1 2 3 4|
|► Heating/cooling system||1 2 3 4|
|►Windows||1 2 3 4|
|►Siding||1 2 3 4|
|►Kitchen||1 2 3 4|
|►Bathroom(s)||1 2 3 4|
|►Closet space||1 2 3 4|
|►Floors||1 2 3 4|
|►Landscaping||1 2 3 4|
|►Driveway||1 2 3 4|
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; 23 and 31, less work, but some that could be costly; and above 31, you’re currently in great shape.
But 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 the 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 moving expenses must also be factored in. Those costs not only include hiring movers and getting new return address labels, but window treatments, new furniture, new decorations, wallpapering, painting, rugs, and lighting.
Take your time in deciding whether to move or to add on. It’s one of the biggest decisions you’ll ever make.