Does it make more sense to sell your current home to buy a new one, or to simply stay and renovate it?
Investing in real estate, whether by improving your current property or buying a new one, is usually a smart move. However, one of these options may be better for you, depending on your situation.
In this article, we will explore significant factors to consider as you make your choice. Let us get started!
Factors to Consider Before You Decide to Sell or Stay
As we have mentioned, there’s no one-size-fits-all answer when deciding on a renovation or a sale. If you are currently considering these options, here are the factors to take into consideration:
1. Costs
One of the most fundamental things to do is compare the costs of renovating your current property with the costs of acquiring a new one.
Gary Hemming, Owner & Finance Director at ABC Finance shares, “People invest in new homes for all sorts of reasons other than finance. However, whatever your primary motivation is in seeking alternative real estate investment possibilities, having a clear picture of how much more or less you will spend on a new investment is an essential first step.”
Some of the costs associated with buying a home are obvious, but there are some hidden costs of home ownership to be aware of, too. For complete clarity on your potential financial commitment, it would be advisable to consult with a real estate, mortgage, and tax professionals.
2. Legal Requirements
If you’re thinking of buying a new home or renovating your current one for commercial purposes, this could be considered house flipping, and you’ll need to be aware of the legal risks of house flipping.
Even if all you are doing is renovating your home for residential use, you may still need to obtain certain permits from your local government housing authorities.
3. Purpose of the Home
Your primary reason for wanting a new home may determine, to some degree, whether to stay or sell. Are you looking for a new residential property, or are you looking to move into a different area? Your decisions should be guided by the specifics of your circumstances.
Gavin Yi, Founder and CEO of Yijin Hardware, advises, “If you have a growing family that needs more room, moving to a significantly larger property may make sense. On the other hand, if you do not need that much more space, making improvements or customizations to your current property may help you save time and money, and you will not have to worry about your family getting settled into a new area.”
If you are doing the opposite, and your family is getting smaller with your kids striking out on their own, you may decide that you need a smaller property with fewer maintenance requirements. Selling your current property for a smaller one would be a smart way to reduce your expenses without having to compromise on your standard of living.
4. Market Trends
Knowing when to sell your home is just as important as the decision to sell it in the first place. Market trends can change rapidly and may easily undermine many of the assumptions you may make or hold in the present.
Charles Platon, Founder at Peel and Stick Wall Murals, weighs in with this advice: “The question isn’t only whether to renovate or sell. Whichever option you decide on, there is also the question of timing to consider, as economic factors can significantly affect things like the cost of materials if you decide on a renovation or whether you’ll be able to find a buyer for your home if you decide to sell.”
5. Lifestyle Disruption
Buying a new property will typically come with some amount of lifestyle disruption. If you want to move to a new area, you may need to consider how things like changing schools or jobs might affect you and your family.
While the emotional and mental impacts of moving into a new area are not always quantifiable, moving house can lead to significant levels of lifestyle disruption. The ease of integrating into a new area, such as with things like finding new schools for your children, making new friends, and so on, should be considered before you decide on a new home.
On the other hand, an extensive renovation to your existing home will also likely take a toll too, as you may have to live with significant amounts of discomfort for a while.
6. Customization
One of the greatest advantages of renovating your existing home is that you will be able to do it just the way you like. Since you are in control of the entire process, you can modify your space to closely meet your needs and preferences.
If you have a limited budget, you may not be able to afford extensive renovations or customizations after purchasing a new home.
Meanwhile, a custom renovation to your existing home, if done well, may improve its value and bring in more income in a sale or rental down the line.
Rain Yang, Founder & CEO of WoodenAve, says, “Strategic home improvements are an excellent way to add value to your home. The best part is that these improvements do not always need to be extensive or expensive.”
Final Word
So, should you sell your house and buy another one, or should you stay and renovate the current one? The answer depends on your needs and circumstances. As we have shared in this article, your decisions should be based on your financial situation, lifestyle needs, and market conditions.
Renovating allows for customization and may increase the value of your current home, but it may come with temporary inconveniences. On the other hand, buying a new property offers a fresh start but can be costly. There is no one-size-fits-all solution—what is best for you depends on your unique circumstances. If your heart is set on a renovation, you may enjoy taking a look at these summer home improvement projects for some inspiration, and if you enjoyed reading this article, we invite you to read our guide to the must-have features of your dream home.
