Moving Up Caveats

When clients ask whether they should remodel their homes, I recount the christmas night my wife complained about the scaffolding spread out in the living room, just ruining her vision of perfect christmas morning in our partially renovated home.

That wasn't the only nightmare we faced in the year-long transformation of a 2700-square foot home. The ongoing hassles, the unexpected expenses, the now-you-see-them-now-you-don't workmen -- all have left us thinking with little question about whether remodeling or moving is better.

"It's like asking if you should poke yourself in the eye or go on a ski vacation," I said. While we enjoyed the end result, "I wouldn't do it again."

Americans love (or say they love) to remodel
There are, of course, plenty of people who are happy with their renovations, and remodeling is certainly a thriving business. Americans spent $245 billion last year fixing up their homes, according to Harvard University's Joint Center for Housing Studies, and the boom shows no signs of slowing.

For many people, though, moving is the simpler, less expensive and certainly less stressful option.

At first glance, there seem to be plenty of cost advantages to staying put and renovating. If home prices are accelerating rapidly in your area, you may be able to add on for less than it would cost you to buy a bigger home.

You also avoid the considerable costs of selling your home, buying a new one and moving, which can drain away 10% or more of the value of your home each time you change abodes.

Does buying and staying really pay off?
In fact, the conventional wisdom about building wealth is that the fewer times you move in your lifetime, the better.

Let's say you have two home buyers, each starting out with a $100,000 home. The first buyer stays put for 30 years, while the second moves up to a bigger, more expensive house every 10 years.

As you can see, the move-up buyer can wind up with a much more valuable home. But this buyer also paid more over the years in monthly mortgage payments, and he still has 20 years left on his final loan. Factor in those two things, and the buy-and-hold homeowner seems to come out ahead.

What are the real costs involved?
Getting a handle on costs may be one of the toughest parts of any move vs. remodel decision, largely because renovations can be hard to predict. Once you tear into a wall or start excavating, who knows what you'll find?

An architect can help give you a ballpark on a remodel, and he / she may even point out some ways to save money.

Article by Rick Touchstone - Image 7 Web Solutions. Should I remodel?

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