Not everyone is fooled by the idea that the grass is always greener on the other side.
Given the option to make changes to their home or opt for a new one, 76 percent of Americans would rather renovate than use their savings for a down payment, according to real estate information company Zillow’s annual Housing Aspirations Report. And it's no question that homeowners are taking advantage of the option to renovate. In 2017, 58 percent of homeowners renovated their homes with a median renovation cost of $15,000, according the 2018 Houzz & Home study of annual renovation trends.
Renovating is often seen as the only way to get everything you want in a house, from the ideal kitchen setup to the spacious closets you covet. This idea is reiterated in popular HGTV shows like “Property Brothers” and “Love It or List It,” which stress the emotional and monetary value behind a remodel.
If you’re trying to decide whether to renovate or sell, here are seven reasons to consider renovating rather than buying a new home.
You can enjoy the updates. When you prepare your home for sale, your real estate agent may recommend updates – from minor fixes to a major overhaul – that will help increase your home’s value. But rather than making updates just before putting your house on the market in hopes of boosting your return on investment, consider renovating now to improve your own quality of life at home.
You’re emotionally attached. How can you possibly sell the house you raised your kids in when the lines showing their heights at different ages are still in the kitchen doorway and you can still picture them taking their first steps across the living room floor? Sometimes the memories are too good to leave, at least for now. In this case, it may be better to remodel a couple rooms than reluctantly sell your home.
“Whether you and your house have been through some trauma together and you’re kind of bonded now or you just truly love the place, you are emotionally attached. It’s not just financial,” says Zillow senior economist Skylar Olsen.
You have the money to renovate. If you have enough cash in the bank to fund your planned renovations without having to take out a loan, you don’t have to be concerned about higher monthly payments or rising interest rates. For older homeowners who have ample savings, an improved home with no additional debt is all the more enticing.
Zillow’s report found that not only do three-quarters of the 10,000 respondents plan for renovations rather than making a down payment, but the preference to renovate over moving gets stronger with age, as homeowners are more likely to have greater equity in their homes and more savings in the bank. Eighty-seven percent of people over 55 and 91 percent of retirees prefer using their money to renovate rather than buy.
You’re making the property safer. Whether you recently purchased your fixer-upper or you’ve lived there a couple decades, it may be time to overhaul some dated systems and ensure your home is keeping you safe and healthy. Consider having professionals check for old electrical wiring, dated heating systems and moist areas that may invite mold.
Before you spend money renovating for cosmetic reasons, “absolutely the No. 1 thing that people should be focused on is maintenance and repair,” says Kevin Busch, vice president of operations for Mr. Handyman, part of the Neighborly network of home service providers.
You skip the cost of moving. Moving is expensive when you factor in the cost to make updates, place your house on the market, pay closing costs and then fund a move. The cost of moving even a short distance can climb quickly – north of $10,000 – if you’re hiring full-service movers, and it can still reach above $1,000 for just a moving van rental. Especially if you’re expecting a modest net profit on your house, the additional cost to relocate may not be worth it.
Renovations build more equity. If you’ve only been in your house a few years and you have a mortgage, your equity in the house may be minimal. As a result, you wouldn't net much profit from the sale of your house.
Instead, you have the opportunity to strategically improve your home with projects that can grow its value. A new roof, a master suite addition or a kitchen renovation can all be key changes that will make your house more desirable down the line. But be careful not to overimprove. A swimming pool in a neighborhood where no other houses have one doesn’t add much value, for example.
You have the opportunity to customize your living situation. Building your own custom house isn’t always within your budget, but renovating your existing home to better meet your needs and daily habits may be doable. You may want an open floor plan between the kitchen and family room to make it easier for the family to hang out, for example. Or if you're retired, your renovations may focus on updates that help you age in place so you can stay in your home longer.
You can attempt to save on the cost of labor with a do-it-yourself project. But consider your skill set before you try to rehab a bathroom by yourself. A botched DIY job can create a bigger and more costly project when you do have to call in a pro.
Projects can be simple and inexpensive.
Perhaps your home is looking a dated. A major renovation is beyond your budget, but you can still perk up your home’s appearance. Luckily, a number of inexpensive do-it-yourself projects will give your home a whole new look. And some don’t even require DIY skills.
Decluttering and deep cleaning can freshen up your home without any cost but your time. Changing bedspreads, towels, shower curtains and window treatments can make a big difference with minimal time investment. Adding accessories such as throw pillows and art can also provide a new look.
Here are other easy home renovations you can do now.Add a coat of paint.
Add a coat of paint.
It was true in your parents’ time, and it’s still true today: The simple home renovation project that gives you the greatest return is a coat of paint. The colors you choose can transform your home. If you’re not selling your home soon, don’t worry about what’s popular and choose a look you like – perhaps a deep red dining room or a striped accent wall. Or, if you’re tired of color, go for a warm neutral.
Cost: $200 to $300 for paint and supplies
Pro tip: Preparation matters, and if you do it right, the prep work may take more time than painting. Buy good brushes.Organize your closet.
Organize your closet.
We all drool over closets filled with drawers, shelves and cubbyholes. Start by checking for shelving and drawer units you already have that would work as closet organizers. You can buy kits at home supply stores that you can install yourself or pieces that require no installation. Don’t overlook simple tools that add an extra closet rod or hanging shoe bags.
Cost: zero to $2,000 and up
Pro tip: Less is more. Unless you have an enormous closet, you’ll find hanging space is more useful than many drawers and cubbyholes. One shelf unit or set of drawers can make a big difference.Update kitchen and bath hardware.
Update kitchen and bath hardware.
Changing the knobs and pulls on doors and drawers can drastically change your kitchen’s appearance. Use these pieces to declare your kitchen modern, traditional, whimsical – there are many choices. While most hardware pieces are a standard size, there are variations so be sure to check the size before you buy.
Cost: $50 to $500, depending on the knobs you choose and the number needed
Pro tip: Shop online. The hardware selection is larger, and the prices are lower.Spruce up your front entry.
Spruce up your front entry.
Painting the front door, installing a new mailbox and house numbers and planting fresh flowers in pots or in beds can vastly improve the look of your home – and for minimal money and effort. Doing just one or all of these projects can make a big difference. Shop online for mailboxes and numbers, where you’ll likely find more options.
Cost: $50 and up, depending on the projects you do
Pro tip: Changing the front door may require a permit in some municipalities. Know the rules.Install molding.
With crown molding you can completely transform a room, and it’s not that expensive or hard to install. In addition to installing molding in the baseboard area and along the ceiling, you can use molding to create custom designs on walls and ceilings and around mirrors and light fixtures.
Cost: $100 and up
Pro tip: Paint the molding before you install it.Change faucets and showerheads.
Change faucets and showerheads.
Nothing says 1985 like a gold bathroom faucet. Even if you have no plumbing experience, you can change a faucet following simple step-by-step instructions such as these from Lowe’s. Be sure to turn the water off in your home before you start. Changing a showerhead is even easier, and a basic shower massage unit is surprisingly inexpensive.
Cost: $25 and up
Pro tip: Make sure the new faucet has holes in the same place as the old one.Add garage shelving and organizers.
Add garage shelving and organizers.
How you store the items in your garage makes a significant difference in your total storage space. Instead of spending thousands for a custom system, you can create your own with off-the-rack shelves, bins and hooks. A couple of plastic shelving units and outdoor storage bins can provide a lot of storage. Add a piece of peg board to hang tools or sporting equipment on the wall.
Cost: $100 and up
Pro tip: Don’t forget that garage floors can get wet. Keep items that aren’t waterproof off the floor.Replace light fixtures.
Replace light fixtures.
Swapping out a crystal chandelier for an abstract metal fixture, or vice versa, can improve the look and feel of a room. Changing a light fixture isn’t hard, as long as you are careful and turn off the electricity while you are working. Rather than swapping out the entire fixture, another option is just replacing the cover.
Cost: $20 and up
Pro tip: Check salvage yards and thrift stores for fixtures, but make sure the wiring is in good shape.Read More
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She has appeared in media interviews across the U.S. including National Public Radio, WTOP (Washington, D.C.) and KOH (Reno, Nevada) and various print publications, as well as having served on panels discussing real estate development, city planning policy and homebuilding.
Previously, she served as a researcher of commercial real estate transactions and information, and is currently a member of the National Association of Real Estate Editors. Thorsby studied Political Science at the University of Michigan, where she also served as a news reporter and editor for the student newspaper The Michigan Daily. Follow her on Twitter or write to her at email@example.com.
Devon Thorsby | June 5, 2019
Homeowners should not fret, as long as they're prepared for the possibility of a downturn.