Is It Better to Renovate or Move? Here's What Real Estate Experts Think
Buying a home is probably among the biggest investments you'll ever make, and yet for many of us, the process still involves a fair amount of compromise. Your house may not have your dream kitchen or enough bedrooms for your growing family. Maybe you didn’t have the funds to renovate right away and you opted to live in the space until you could save up to make some big changes. Well years have a way of passing and many homeowners still find the prospect of renovation overwhelming. At this point it might seem easier to just find a new house that meets all your needs. But is it? We asked real estate experts for advice on when it’s wiser to pack up and move or brave a construction zone.
Depends on the Inventory
The first questions you have to ask yourself is if you could even find a new home that ticks all the boxes on your list. If you live in a highly competitive housing market where properties get snatched up as soon as listings go live, or bidding wars are the norm, securing a home that meets your requirements will be tricky and time consuming.
Are You In An Ideal Location?
Do your best friends live a few streets away? Can you walk to the grocery store or the good local park? Do your kids carpool with neighbors for basketball practice? Are you happy with the school district? If you love your location and there's no real inventory that meets your needs close by, renovation could be the best option. “You have to think about whether you're willing to move further away or if staying in your area is important,” says David Kent, realtor and owner of Charleston Home. His advice: factor in your lifestyle and what role your community plays in your day to day life before you decide to change things. Kent recently made the decision to renovate his home instead of moving to a different town so his teenage daughters could stay in the same school. “I could get exactly what I wanted if I drove 15 minutes away, but the disruption to my family life was not worth it,” he says.
Calculate the Cost
When it comes to finances, the cost of moving is often easier to calculate, says Kent. “You lump the cost all into a mortgage, it's no big deal,” he says. Renovations, on the other hand, are typically an out-of-pocket cost, and you may have to figure out creative ways to finance that choice. “Do you have a [home] equity line? Or are you dipping into a retirement savings or college fund?” he asks. “When you renovate, you have to consider what you lose by taking away from those other areas.”
Another factor to consider is that people generally go over 10 to 15 percent of their budget when renovating. “You may open up a wall and uncover a problem and say, ‘Well, I need to address this right now,’” says Kent. “That's something that can sneak up on you if you don't plan for it.”
Living through Construction
“I always tell clients there are three things that are constant in renovation,” says Kent. “It costs more, takes longer, and is more cumbersome than you think.” Being realistic about that process can help you get through it, he says. Smaller projects like painting or redoing floors—and even updating the kitchen—are usually pretty manageable. “It's disruptive in the sense you may be out without cooking or a dishwasher for a while, but it's livable,” he says.
Things get tricker and the stakes get higher when the scope involves structural changes like moving walls or adding an extension or another level. The first thing you have to do is look at municipal zoning requirements. Does your neighborhood have restrictions that will make your dream renovation impossible? If you are allowed to proceed, bust out the calculator and spreadsheets. “To really get a realistic number, you have to hire a designer or architect, somebody who can take your vision and put it on paper so that the contractor can give you a better cost breakdown of it,” says Kent. The other line items to factor in include: design cost, engineering cost, permitting cost, and construction cost. And whether the job will require you to move out and find a temporary living arrangement. For these reasons, if the house is too small, moving might be more practical.
Consider Your Return On Investment
When realtor Drew Coleman, founder of Opt Real Estate, is asked by clients whether it’s better to move or renovate, he first goes to the data. Coleman uses a Cost vs Value Index to determine if the renovation is adding value of the home in the long run. “It'll tell you, ‘Hey, what would a mid kitchen remodel do to the value of this property? How much money on average would be recouped from that cost?’ If you were to look at it from an equity perspective, often there's certain improvements that will highly affect the marketability and value of a home,” he says. However, other improvements probably won't enhance your bottom line, even though you might enjoy them. “We always show clients that regional or metropolitan area data and often sellers are surprised by it,” says Coleman. For example, in 2024 the average cost nationally for a major midrange kitchen remodel is $70,982 and 49.5 percent of the cost would be recouped, according to Remodeling Magazine.
Will The Renovation Improve Your Life?
If moving is out of the question (hello, mortgage rates), ultimately renovating, even if it’s not adding dollar value to your home, can improve your quality of life and your happiness. “If your kitchen was laid out differently and it would take half as long to prepare your meals, that’s a value add to your life,” says Coleman.“There's a value in finding peace and enjoying your home more.”