Relocating vs. Renovating
July 1, 2021
As demonstrated by the popularity of the HGTV show “Love It or List It,” at some point or another, many homeowners are faced with the decision of whether they should sell or renovate. This is a huge commitment, as both options require potentially large sums of money. There are several factors to consider when making this decision:
How much equity do you have in your home?
Before you put your home on the market, it is important to consider the equity you have in your property. Equity is the difference between what you owe on your home and how much it is worth. If you have a large amount of equity, you might want to consider drawing on it to help pay for the renovations. However, you want to ensure you don’t deplete it. If your desired renovations cost more than the amount you have in equity or other savings, you may want to consider selling. If you do choose to sell, you can also use the equity in your home as a down payment.
How much would the renovations cost and how much would they increase your home’s value?
If you are grappling with whether to sell or renovate, there is probably at least one thing you don’t like about your home. When mulling over this decision, you want to weigh the costs of the renovations and the value they will add to your property. For example, if the renovations are minor and/or add significant value, then you might want to consider staying put. However, if the renovations cost more than the value they will add to your home, you probably want to look at selling. Moreover, you want to be cautious and make sure that the renovations don’t boost the value of your home too far above the other homes in your area. Raising the value of your home too significantly can cause you to lose money when you do sell.
How invested are you in your current home?
Your emotional investment in your home is another factor to consider. Are there sentimental attachments? For example, did your children grow up in your current home? Is it your first home with your significant other? If so, it may be harder to imagine selling. The schools in your current area are another piece to keep in mind, as well as the location of your property and whether the amenities of the community outweigh the things you don’t like about your home. Conversely, if you don’t like your current home’s location, then selling and relocating is probably a better option.
Is it a good time to buy or sell?
The real estate market should be included in your list of pros and cons for a variety of reasons. First, you should not only look at the housing market where you currently hold property, but also where you are looking to buy. Second, you want to evaluate how many homes in your neighborhood are for sale and how your home compares to them, as this can affect how long your home is on the market and its listing price. Third, you should determine how much equity you have in your property based on the health of the market. Finally, you may want to consider holding off on selling your home if the housing market is not performing well.
Whether you decide to list it or stay put, Mlend has you covered! We offer home equity loans, refinancing, and new mortgages. Contact us today and we will gladly assist you with your financial needs.