REMODEL OR MOVE?

You鈥檝e been in your house for a while and are still fond of the place. But it鈥檚 no longer exactly what you need or want.

So, do you put the home up for sale and move out, or upgrade and settle in for the long haul?

To answer that question, you鈥檒l have to think about your emotional attachment to the house, whether renovating will bring a good return on your investment and whether you can afford to buy a replacement home. These and other factors will help you make your choice.

Here鈥檚 what experts believe are the essential issues when deciding whether to remodel your current place and stay put, or buy a different home and move out.

1. Is your home in your heart?
Your emotions will have a lot of say in whether you stay or go.

鈥淭hink honestly about your relationship with your neighbors and how you feel about your location and the surrounding area,鈥 says Fred Wilson, a principal with Morgante-Wilson Architects in Evanston, Illinois. 鈥淚f you have a strong connection to the neighborhood and emotional ties to your home, renovating may be the right answer.鈥

Wilson鈥檚 firm estimates that 70 percent of homeowners in the remodel-or-move quandary ultimately decide to stay put and make changes to their house.

A residential architect may envision upgrade possibilities you may not see and help you get maximum functionality out of the home you already have. You might tap your home equity to pay for the improvements.

2. Can you budget realistically?
Realistic budget planning is critical when deciding whether to make your current home work or look for another one.

Budgeting accurately is essential if you do decide to renovate.

鈥淎 lot of homeowners don鈥檛 know exactly what they want,鈥 says Prashanth Pathy, an agent with Keller Williams Realty in Chicago. 鈥淪ay they have $50,000 and the contractor says he can do it for that. But then their wishes change, they want different materials, it doesn鈥檛 come out as they imagined 鈥 and that鈥檚 where the budget gets blown up.鈥

3. More room or more rooms?
Many homeowners base their decision to sell on the need for more space. However, a smarter layout that adds one more room but not more square footage can help some homeowners avoid moving, says Doug Perlson, New York City-based founder and CEO of real estate brokerage RealDirect.

鈥淎 spacious three-bedroom home can often be reconfigured to four bedrooms and allow a family to have a more efficient layout without needing to leave the home they love,鈥 he says. 鈥淲e recommend laying out your floor plan with a designer and seeing if a reconfiguration could make sense. It is often much less disruptive and expensive than a move, and may solve your problems.鈥

If you can鈥檛 find a spot for a new room? 鈥淢aybe it is time to sell,鈥 he says.

4. Will only a move be enough?
Does your current home have what you consider to be a serious problem? It could be neighbors you can鈥檛 tolerate, a not-so-great school district or a cramped physical setting 鈥 including home and yard 鈥 that will never meet the needs of your growing family.

If that鈥檚 the case, you really have just one choice: Move.

But maybe the issue is that you essentially can鈥檛 afford the home you currently have, so a downward rather than upward move is necessary.

This is fairly common. The 2016 鈥淗ow Housing Matters鈥 survey from the John D. and Catherine T. MacArthur Foundation found that more than half (53 percent) of Americans struggle to make housing payments and have had to make sacrifices or trade-offs to cover those costs.

5. How long will a renovation take?
Many people overlook the fact that renovation involves 鈥渁 serious, long-term commitment in time and energy,鈥 says Pathy of Keller Williams. 鈥淭hey have to get their head around the process 鈥 time being the first and foremost consideration.鈥

He鈥檚 not kidding.

A kitchen remodel involving new countertops, cabinets, appliances and floors can stretch on for three to six months. If ductwork, plumbing or wiring has to be addressed, the job could take longer. A bathroom remodel can require two or three months, while a room addition can take a month or two.

Pathy says you have to be ready to be very patient. 鈥淚t鈥檚 very difficult to live in something that鈥檚 being renovated.鈥

6. Will you earn back the upfront costs?
Before opting to remodel or sell, try to determine what return on investment you鈥檒l see on either option. So says Brian Davis, who has bought, renovated, leased, managed and sold many homes and is director of education for Spark Rental.

If upgrading, 鈥淲hat鈥檚 the average return on investment for the renovations you鈥檙e considering?鈥 he asks.

Most home upgrades do not pay for themselves in the form of a higher eventual sale price. Some renovations manage to recover 80 to 90 percent of their costs, while others barely cover half their expenses.

If you鈥檙e thinking of listing your current home and buying another one somewhere else, ask yourself whether you鈥檒l be in the new place long enough to recoup the costs of taking out a new mortgage and moving. Davis says it has traditionally taken seven years to earn back those upfront costs.

7. Would you be 鈥榦ver-improving鈥?
Weighing against renovation is the risk you鈥檒l 鈥渙ver-improve鈥 your home compared with others on the block.

An over-improved home won鈥檛 sell for as much in its location as it would in a neighborhood with similar houses, says Kevin Lawton, a real estate agent at Coldwell Banker Schiavone & Associates in Yardville, New Jersey.

鈥淲hen you are in a neighborhood that has starter homes and smaller homes, adding a large addition or doing an extensive renovation may not yield the return one would expect,鈥 he says.

With one of Lawton鈥檚 listings, sellers had added a large, handsome fifth bedroom suite to the first floor. Buyers passed on the house for smaller ones in the same development, and the house lingered unsold even after the sellers chopped $30,000 off the price.

HTTPS://KCREALESTATELAWYER.COM