You’ve outgrown your current home, and now you’re wondering whether you should move to a new place or add space to your current place. It turns out this decision is harder than it would seem.
Whether it makes more sense to move or add on to your home will depend on your situation, including the climate of your local housing market, your area’s tax regulations and the type of construction you’re considering. So, before you put in an offer or pull out your sledgehammer, ask yourself these five questions.
1. What are the costs and financial benefits of each scenario?
If finances are a major factor in your decision, take a look at the cost vs. value averages for your region along with the project type, and create a list of the expenses and financial benefits of adding to your home. Just don’t be surprised if the cost of your improvement isn’t 100 percent recouped by a boost in your home’s value.
“There is a constant increase in the cost associated with adding structures onto a home,” said Adam Walden, a real estate agent with Coldwell Banker in southwest Florida.
To make your cost-benefit analysis as accurate as possible, get three bids on your construction project, said Anne Graffy, a Realtor who’s a member of the American Society of Interior Designers.
Do the same for the costs and financial benefits of moving, she said. Just don’t forget commonly overlooked expenses like closing costs for buying and selling; moving expenses; and possible tax changes.
2. Can you handle a small project that turns into a big project?
Instead of building a new bedroom with a bathroom, you’ve decided to keep things on a small scale and add a garage to your home. Simple, right? Not necessarily.
In many areas, if you break through a wall and discover asbestos, you’re required to remove all asbestos from your entire property, Graffy said. You might run into similar issues with obsolete electric systems, roofs and plumbing systems.
To lower the chances that an isolated project will turn into a property overhaul, Graffy recommends visiting your local code enforcement office to find out which regulations could affect your home improvement plans.
3. Are you short on time?
Do you need more space for a baby who’s due in six weeks? Tackling a construction project on a tight timeline is a risky endeavor.
“You’re going to have the baby and she’s going to come home to a construction site,” Graffy said.
She stressed that home renovations almost always take longer than expected, so manage your expectations by padding your schedule with extra time.
4. How long will you stay in your current home?
A cost-benefit analysis also doesn’t matter as much if you’re adding on a space that brings enjoyment or utility to your life. However, to reap those benefits, you need to be confident you’re going to remain in your home for a while. Home improvement projects are not only likely to require more time than you had planned, but they also can cause stress.
“You don’t want to go through six months of remodeling, and then get a job or career change and move,” Graffy said.
5. How do you feel about your current home?
Are you crazy about your neighborhood, school system or your scenic commute?
If there are non-monetary factors that give your current home a special place in your heart, don’t ignore them for the sake of potential financial gains. Even the best Realtor won’t be able to locate another home with decades’ worth of your family memories.