List home-improvement goals
Start by making a list of upgrades you’d be willing to pay for, either in your current home or a new one.
For example, if your family’s growing, you might want to add a bedroom or a bathroom. If you often cook at home but your kitchen space is older and inefficient, it might be time for an update.
Learn your local market
There are a few ways to get the answer to that question. One is to compare your home’s value with recent sales in your neighborhood. If neighboring homes are worth more than your house, a remodel could bring the value of your property in line with others in your neighborhood, which could be a good investment.
However, if you already own the most expensive house on the block, you probably won’t get a quick return on your money if you pay for a major remodel.
Also, be aware of any restrictions that your local community might place on making changes to your home. Contact city officials to learn about building codes and restrictions. And if you’re part of a homeowners association, ask a board member to provide neighborhood home-improvement guidelines.
If you need more space but have restrictions on adding square footage to your home, then selling and buying a bigger home will probably be the better choice.
Estimate home-renovation costs
Find rough estimates for home-renovation projects by reading industry sources, such as Remodeling magazine, which publishes a list of typical renovation costs across the country. Don’t depend on these numbers though: If you’re leaning toward a remodel, contact a local contractor for a more detailed estimate.
Along with figuring the costs, you’ll also need to decide how to pay for a renovation.
Compare costs for selling your home
If you sell your home, you might not have to pay for major renovations, but you’ll still have expenses. There are moving expenses and travel costs to search for homes in different areas, which can add up quickly.
Add these costs together and you can expect to pay thousands of dollars before you even move to a new home. And you’ll need to have a down payment too.
If you have equity in your home, however, you can use money from the sale to help fund your next move.
Weigh emotional benefits
If you’re not happy with your home but like your neighborhood, it might make sense to upgrade the house and stay put. If you love where you are and depend on your neighbors, it probably makes more sense to remodel.
The reverse is also true. If you’re not happy with your home’s location, or with other factors that a remodel can’t fix, it might make sense to sell and find another property, she says.
As a homeowner, you’ll want to carefully weigh the choice between remodeling and moving. By considering the financial and emotional effects of both options, you can confidently make the right decision.