Should I Buy or Should I Remodel? 5 Things to Consider

At one point in our lives, most of us decide we want a change of scenery. While some people are bold enough to pack their bags and move to another country, others try to work with what they have.
One question most people ask themselves when looking for a change in their living environment is: should I buy a new home or remodel the one I already have?

Let’s look at the things you should keep in mind when deciding between buying and remodeling.

1. What Do You Need?

Think about the reasons behind your need for change and improvement. Do you need additional space? Can you transform your basement or convert your loft into an extra room? Do you need nothing more than a few tweaks here and there or an entirely new plumbing system, for instance?

The bigger the change you need, the greater the costs. The contractor will have to demolish and rebuild on the existing structure. However, in spite of the increased costs, according to the National Association of Home Builders (NAHB), the price of a new home is higher than the price of an existing home.  A new home will be more energy efficient and will save almost 25% more than one built even five years ago.  Plus a new home will not need expensive updating for many years so the price may not be much higher than you think.

2. Think “Energy-Efficient.”

With the promise of reducing your utility bills by up to 50% and saving the planet as well, green technologies are something you should look into before making a decision. Again, depending on how complex the project is, the costs will vary broadly.

Remodeling with energy-efficient appliances is more expensive than just installing conventional ones. If you want a complete upgrade of your old home (installing water-saving systems, high-efficiency furnaces, upgraded insulation, and so on), then you need to understand that the costs can quickly spiral up. On the other hand, although the initial investment might be bigger than if you were to opt for conventional appliances, it will save you more money in the long run.

3. Consider Your Customization Options

A new home might come with new fixtures and modern designs, but does it have all the features you desire? Make sure to work with a reputable builder to go through all the options available to you.  It is much easier to put upgrades in right away verse tearing something out and paying for it twice.  Maybe the floor has carpet instead of hardwood, or you’re not entirely sold on the kitchen design.

Remodeling, allows you to update your house and stay in an area you know and love. You can add any modern feature you desire. However, try to think of your remodel project as an investment and avoid excessive personalization. You might love your bright red kitchen tiles, but a potential buyer might not get impressed by them. Stick with improvements that add value to your home, such as an energy-saving heating system, new doors, or insulation.  Keep in mind remodeling project only return at most 45 cents on a dollar so focus on areas that have the highest return on investment.

4. How Much Money Do You Have?

Whether it’s remodeling or building a house, you need funds. Maybe you’ve been a busy chipmunk, collecting enough money throughout the years to afford such a big investment. Most people, however, have to get a loan from the bank if they want to make any drastic change (such as buying a new house) or significant home improvements.

The cost will depend on your credit history, ability to repay, capital, collateral, appraisals, terms of the loan and interest rates. So, before you decide, try to determine how much money you can obtain and what you can reasonably do with it.

5.What Time Frames Are You Considering?

Another thing to consider when pondering between remodeling or building is, how long you plan to live in that house? If you think of staying for a longer period or don’t have enough money, the former will suit you better. But, that doesn’t mean you shouldn’t invest in energy-efficient upgrades. If you decide to sell your home at some point, these upgrades will increase the value of your property significantly.

Choosing between buying a new home or remodeling your old one requires careful analysis of your needs, budget limitations, and so on. Keep all these things in mind before you make a final decision.