 There
comes a point in the life of every household, when the clutter
gets too much, and the space feels too cramped. Then the question
comes up: shall we move or remodel? For years, the conventional
wisdom has been that it is better to just stay put. A recent MSN
Money article dug a little deeper into the factors that should
be looked at when deciding whether to move or remodel.
First Steps
Before you run headfirst into the move-or-remodel
question, first consider some alternatives:
- Reorganize your life. Employ more storage
units and a better use of space to help remove clutter from
your life. Get rid of stuff you really don’t use or need.
De-cluttering can really help to realize the space you have,
and you may re-think needing to remodel or move at all.
- Think critically about what you use your
rooms for. Do you have a spare room you hardly ever use, and
would be far better off being re-done into a study with a futon
that can be turned into a bed for guests? Changing the purpose
of room can be a lot cheaper than building a new room!
- Do you really need grand-scale changes,
or are minor facelifts all you are really after? If the latter
is true, then consider refurbishing instead. Add new carpeting
and reface some cabinets and you might be more than on your
way to the new feel you have been after.
- Consider your financial fitness. Do you
have a solid retirement plan, and a healthy rainy day savings
account? If not, and you have to do something about your living
condition, then moving may make more sense. However, if you
are financially sound, then you have more options!
Moving
According to a Wall Street Journal study,
over a 30-year period, the cost to keep a typical house running
smoothly could easily end up costing four times the home’s
original purchase price. Such a conclusion means that it can end
up being cheaper to move into a new or newly remodeled home every
10 years, and forego the major maintenance expenses long-term
homeowners face. When dealing with just the numbers, make sure
you think about the following costs you will incur in a new home:
- Commissions, closing costs, moving expense,
etc. These costs will typically end up being 10 percent of the
value of the house you are selling.
- Cost of a bigger mortgage.
- Higher utility bills.
- Bigger homeowners’ insurance.
- Higher property taxes.
- Any expenses required after moving in,
such as landscaping, or window treatments.
- New furniture to accommodate a bigger
house.
Remodeling
Remodeling is big business. According to Harvard
University’s Joint Center for Housing Studies, construction
on single-family homes reached $233 billion in 2004, up from $206
billion in 2001 – and such increases look set to continue.
Other than not having to deal with the considerable costs and
stress of selling your home, buying a new home and moving; there
are also a number of other, less financially driven factors to
consider. Are you extremely attached to your current home? Is
it in a neighborhood you love? Is it in a convenient location?
When all is said and done, there are plenty of good financial
and non-financial motives for remodeling. The biggest worry with
remodeling compared to moving, is that with remodeling, it is
almost impossible to predict how much it is going to end up costing.
Think about the following costs to make sure you have estimated
sufficiently:
- After discussing the project with architects,
builders and suppliers, and have gathered a number of quotes,
then add on about 10-20%.
- Consider any financing costs that will
be involved.
- If the project will increase the size
of the house, consider higher utility bills, homeowners’
insurance, and property taxes.
There is no easy answer as to whether to remodel
or move. Just remember to: (1) re-organize then re-consider; (2)
evaluate your personal financial health; (3) research all applicable
costs; (4) consider any non-financial factors; and (5) listen
to your gut feeling.
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