You are at the point in your life where you are tired of your outdated home. You have the funds to do something about it, but you are unsure whether you want to renovate it or just move and buy a newer place. The answer is not always so simple. Choosing whether to buy or renovate will depend on a case-by-case basis, and the better option will depend on your situation.
When deciding which is the better option, you will need to ask yourself a variety of questions to help you figure out which course of action to take:
- What is your budget?
- Is there an important reason you would want to stay in your house?
- Is it possible to renovate your home without having to redo the floor plan?
- Will the renovations increase your home’s value?
- What are your long-term plans?
- How will your mortgage be affected?
- How will your property taxes be affected?
All these questions are important to consider when you are making the decision whether to buy or renovate.
Both options have pros and cons.
Advantages of buying
Here are some of the advantages of buying a new home:
- Profit from selling
Depending on the value of your home when you purchased it compared to when you sold it, you might very well make a large profit, especially if the market is falling in your favor. If you do make a large profit from your sale, you may be able to buy a house that will need no improvements to make it the home of your dreams.
- No contractor/renovation loan
If you were to choose to renovate, you would have to deal with contractors and, most likely, a renovation loan. The process of renovating could be long and extensive and would more than likely disrupt your daily living for a longer period.
- Income taxes
Depending on where you live, your state laws could make it so that selling your home provides you with extra cash without added taxes due to capital gains exemption. There are also other tax credits available when it comes to purchasing a new home.
Disadvantages of buying
Some of the disadvantages of buying include:
- Moving process
The moving process can be chaotic for all involved. It will disrupt your life and can be quite overwhelming for you and your family.
- Selling your home
As exciting as it can be to buy a new home, you also have the task of selling your old one. Sometimes it takes quite a while to sell a house. You might have to do some minor renovations before you can list it as well, especially if you are listing it through a realtor. Realtors also have a fee that you will have to pay.
Advantages of renovating
If you are considering renovating your current home, these are some of the advantages:
- Lower costs
Unless you will be completely gutting your home and renovating the whole place, you will more than likely pay less to renovate it than you will to buy a new one.
- Sense of personalization
If you’ve been in your current house for a while, it likely feels like home. Renovating the spaces you want will only strengthen that feeling. If you were to buy a new house, you may lose that personal touch for a while, as you will be moving to a new and unfamiliar space.
Disadvantages of renovating
Some of the disadvantages of renovating to consider include:
- Costs will add up
If you are looking to renovate all or most of your home, the costs will quickly rise. To keep the costs lower than what a new home purchase would be, you might be limited on the areas you can renovate.
Most remodeling projects will require you to obtain a renovation loan. This process can be lengthy, and if you do not have the best financial track record, you may have a hard time getting approved for these types of loans.
Having ongoing construction in your home can be daunting, overwhelming, and cause a huge disruption in your everyday life. In some cases, you may have to find another place to live while certain areas are being remodeled. This will be a loud and stressful situation for most people.
There are advantages and disadvantages to buying or renovating, and the best choice for you depends on a variety of factors. You and your family will have to consider a lot of different aspects, and you will need to research both before deciding which route you want to take. For any of your buying or renovating questions, get in touch with us at Mr. Roof today to discuss your renovation plans.