Everything you need to know about insurance basics, like coverage types, limits, cost and more.
Should You Move Or Remodel?
You’ve spent years making a house your home, but now you’re looking for a new canvas to work with. That doesn’t necessarily mean packing up and putting your humble abode on the market. You have options to consider — move or remodel?
We’ve highlighted some factors to consider that’ll help you make a well-thought out decision whether to renovate your current space or buy a new home.
What’s Your Reason for Moving or Remodeling?
First, determine why you’re making a change. Maybe you’ve ran out of room after welcoming a new child or aging parent into the space. Or perhaps you've launched a business that requires a more expansive spread than an office nook. Whatever the reason, depending on your resources and level of attachment to your current home, your decision is probably predominantly a matter of price.
On the other hand, your desire for change might be motivated by shifting tastes or a craving for freshness. Remodeling may be the preferred approach, assuming the changes you envision would involve less money, time and effort compared to moving into that "perfect place."
Pros of Moving to a New Home
The blank slate of a new or new-to-you home inspires for obvious reasons — it represents a chance to shake things up. Here are some benefits to keep in mind when you’re considering moving to a new home.
Start fresh in a new space. Choosing to move instead of remodeling allows you to start fresh in a completely new space. It’s a large undertaking, yes, but if you have your heart set on a big, foundation change, this is your play.
Get more of what you want. Moving to a new home gives you the chance to knock off more items on the list of what you want out of a home. For instance, if you want a home with more bedrooms, more bathrooms and more kitchen space, it’ll be less stressful to find a home with the space you want than trying to accomplish that renovation project in your current place.
Avoid the mess. Remodeling can be quite an invasive project — depending on what you’re renovating, you could be dealing with months of living in a construction zone.
Move your location. Are you looking for a change beyond just a new living space? Maybe you want a neighborhood with more kids, a less busy street or a better school district. Perhaps a closer commute to work would free up time for you to spend with your family. You may find it difficult to leave a home you love, but a location change could bring a lot of new opportunity for you and your family.
Pros of Remodeling Your Home
There is, however, also something to be said for reevaluating and renovating the home in which you now reside. With creativity, imagination, planning and some effort, transforming your current space might be the perfect solution. Here are some reasons a remodel may be what you’re looking for:
Get what you want. Choosing to remodel your home means you know what you’re working with, so your expectations are clearer. You can design a renovation plan that meets your wants and needs. Unless you’re building a new home, buying a home doesn’t quite give you that customizable control.
Having trouble seeing your abode with new eyes? Try visiting a home similar in size and layout to yours currently on the market. Take an in-depth look at how someone you don’t know utilizes a space not all that different from your own. Think about how you could modify and integrate what you like into your renovation plan — and make mental notes of what you don’t love to make sure you don’t repeat it.
Use your home equity. Do you have a lot of home equity? You may be able to borrow against it instead of taking out a new home mortgage. Going this route means you can use your home as collateral to pay for the remodel.
Stay where you love. Don’t want to give up the location you’re in? Maybe you have amazing neighbors in a beautiful neighborhood, a quick walk to the school, close proximity to restaurants and the grocery store. If the idea of saying goodbye to these perks is too much to bear — don’t move! Remodeling can give you the best of both worlds.
It's hard to not let feelings get involved in such a big decision — and that's okay. You wouldn’t want to make a decision between whether to remodel or buy a new home based on emotion alone, but if you love your little private lot on a quiet cul-de-sac street, those feelings are valid and should be taken into account. Remember, lifestyle matters, too. No home is an island. You want the community it exists within to dovetail with your life goals. Take a holistic approach, and the change you affect will likely be more satisfying.
The Cost of Moving or Remodeling
Whether a remodel is more or less expensive than a move naturally depends on individual circumstances and ambitions. Adding a new wing to your house may be cheaper than moving to a fancy neighborhood, but it is probably more expensive than moving to a comparable space one block over.
That said, generally speaking, a full remodel costs around $100,000 on average, according to a 2016 survey from BuildFax, while a single room costs around $10,000. A workable rule of the thumb is $9,500 to remodel a kitchen, $4,800 for a bath and $13,300 to add a room onto a home, according to the 2013 American Housing Survey (the latest data available). To get a better estimate for your specific project, speak with professional remodelers. Estimates can vary widely among contractors, so be sure to request as many quotes as it takes to get a decent idea of the average cost for a project such as yours. And always ask for references. Sometimes a cut-rate deal is not all it’s cracked up to be. Also, be sure to keep these ideas in mind when it comes to saving on remodeling projects. Your bank account will thank you!
Alternatively, hiring movers to pack and transport a three-bedroom house across town costs around $3,000 on average, but can easily reach the tens of thousands of dollars for larger homes, or for moving longer distances. Use a moving cost calculator to get an estimate.
And while we’re on the topic of dollars and cents, be sure to consider how much value the improvements would add to your home when you eventually sell. Are you likely to recoup your investment? It’s tough to tell: Many home renovations do not pay for themselves in a higher sales price down the road. Most experts say the most one can expect to recoup is 50 to 90 percent depending on the renovation and how it "fits" within the other homes in the neighborhood.
Consider the Cost of Living
As you work toward a final decision, be sure to think through the short- and long-term costs: On the one hand, moving may result in a substantially different mortgage payment and terms, utility costs, property taxes and HOA fees. On the other, if you remodel, your property taxes could be reassessed or your insurance premiums could change.
"Remodeling that includes updating electrical, plumbing, heating/cooling or roofing can often make you eligible for better coverage or earn you a discount, while moving to a different home may make you eligible for a lower premium through more advantageous rating factors," says Eric Roethe CIC, Product Development Senior Specialist at American Family. Find out more about insurance and remodeling.
A remodel can also be a great opportunity to make other changes at a reduced cost. For example, if you are adding a room and a section of your attic is opened up, you might be able to replace all of the heating and cooling duct work in your home for less money than it would otherwise cost you because the workers will have easier access than if you weren't remodeling. Updated duct work could reduce utility costs overall, so it's a real win-win!
If your remodel would require a home equity loan, be sure to also factor in the loan payments, and how the loan would impact your overall financial goals. Some home equity loans have higher interest rates and shorter terms than mortgages, so your monthly bills may be higher than moving, even to a more expensive home.
Get a Home Insurance Quote
Once you’ve committed to a plan, it's smart to stay focused on the change you wanted to create in your life at the outset of this process. And while you're at it, give yourself a pat on the back! Deciding to remodel or move is a big decision, but ultimately it's a positive step in your journey to create a healthier, happier and more comfortable environment for yourself and those you care about.