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Remodeling Vs. Buying a New Home

By
Real Estate Agent with The Oscar Group, a Keller Wiliams team

by Lance Langenhoven, Realtor in The Woodlands, TX

The Woodlands Real Estate. 

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After all is said and done, which is really more productive...and easier on your pocketbook?

Perhaps you are feeling the need for an extra bedroom or a game room. Maybe plum and sunshine yellow are no longer your favorite colors.  Tired of that white, painted cabinetry in the kitchen?

Whatever your reason, you are not the only one considering remodeling. According to the Harvard Joint Center for Housing Studies, American homeowners spent more than $92 billion on remodeling last year. Here are a few important things to consider if you're toying with the idea of remodeling versus packing up all those boxes stored in the attic and making a move.

Location is one of the biggest selling points in real estate. Think about why you bought your home in the first place.  What attracted you to the home?  Was it the safe neighborhood, the good schools, living close to work and/or all the great surrounding shops?  Are you close to family, friends, or that favorite babysitter across the street?  These are all great reasons for staying in the home you're in!  Is the need to expand, or change things within your home the only reason you are thinking about moving?  Why not save the hassel of moving, keep the great location, and work with what you've got?

Not only does remodeling give you the control to change and add to your home to fit your exact needs but, by remodeling, you are definitely going to increase the value of your home!  Statistics from a remodeling magazine survey show that minor kitchen remodels return 82 percent of their estimated costs, a bathroom addition will return 72 percent and the addition of a family room will return 71 percent!  On the lower end are window replacements (57 percent), deck additions (54 percent) and the addition of a home office (51 percent).....that's still a pretty nice return!

Another way to determine if your remodeling plan adds value to your home is to compare it to others in your neighborhood. For example, if your home is worth $150,000 and you want to invest $75,000 in remodeling, check out homes on the market for $225,000 and compare them to what your home will consist of once the work is complete. Or, if you have a two-bedroom, one-bath home and want to expand it to three bedrooms and two baths, look up sale prices for similar homes in your neighborhood to see if you are overspending to increase the size of your home.

In some cases you may not improve the market value of your home, but will increase the marketability.  That means, even though you may not get more money for your home, it will sell faster.  It will appeal to more people than it would have in it's original state.

With all this said, depending on when you purchased your current home, interest rates may favor an investment in a new home rather than remodeling a home with a higher interest rate.

If your neighborhood is headed downhill or it did not turn out to be nearly what you thought, moving instead of investing in a property that may not recoup what you will put in is a better choice.   This is a great time to talk to your local professional Real Estate Agent.  You will be able to get more information about what the market looks like in your area and be able to make a confident decision about whether a move is right for you.

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Sometimes you may need a larger space pretty quickly, such as if you have a baby on the way.  The costs of labor are also rising as the years progress.  So, there are situations where you may find a move would be more fitting.

Finally, just as with a move, there is lots of research and legal work involved with remodeling your home.  Always make sure you find out what building permits you may need; or if your home has had previous work done...make sure it had the appropriate permits.

Good luck!  Please feel free to contact Lance Langenhoven if you would like more information on remodeling vs. buying a new home!

Lance Langenhoven, Woodlands REALTOR®

http://www.thewoodlands-houses.com/

 

Comments (1)

Grant Howell
Alex Lowery Real Estate - Frisco, TX
Broker/Owner 214-234-6901
Thanks for the info. It is nice to read blogs that are informative and add value to the community.
Jul 03, 2007 07:07 AM