Here's why now is the time to renovate your home vs. moving
By Kimberly Rotter
Reviewed by James Heflin
Jun 22, 2023
Read time: 3 min
You’re ready for an upgrade. Maybe your family has gotten bigger and you’re desperate for another bathroom. Maybe your income has gone up and you’ve got your heart set on an open floor plan. More rooms, new floors, a beautiful deck…whatever it is that you’re dreaming of but don’t have in your home right now.
Before you hit Zillow®, look around right where you are. You might already be holding a diamond in the rough. Here are a few reasons to consider doing a home renovation instead of moving:
1. More bang for your buck
Remodeling could get you into the home you want for far less than buying. That’s especially true in a high-cost market where you’re looking at big numbers for the kind of home you envision.
The math isn't complicated. Check online real estate sites to get an idea of the price of homes you like. Then subtract the amount you’ll walk away with after selling your home. Don’t forget to factor in selling costs and moving costs (and the new property tax bill you’ll be paying for that more expensive home). What’s left is how much you’ll pay for the house you want. If it’s more than $150,000, you can probably do a bomb-diggity remodel for less, using a home equity loan.
2. Increase your home’s value
Improvements could increase the resale value of your home, allowing you to recoup at least some of the money you spent on renovations. If you remodel or add a bathroom, for example, you might recover more than half of its cost when the time comes to sell. A bathroom remodel is a great way to use a personal loan.
3. Lower your utility costs
Many upgrades can result in less energy use. Upgrading or replacing these items could help you recover some of your renovation costs in lower utility bills over time.
Heating and air conditioning units
4. The real estate market is volatile
Home prices are down in some cities, way up in others. If you’re in a down market, you’ll typically get less for your home if you sell it now. If you’re in an up market, you face the possibility of getting priced out even if you do sell your home. Plus, inventory is low—that means there aren’t a whole lot of homes for sale. Instead of shopping for your dream home, you might find yourself settling for something that doesn’t check the right boxes.
5. Construction costs have calmed
Lumber costs less right now than it did in 2021. Not all construction material costs are down, but they aren’t increasing as fast as they were during the pandemic.
6. Stay in your community
Moving is hard on everybody. If you have an emotional attachment to your block, your community, your neighborhood, you might want to stay put. You won’t know who your future neighbors are or whether they are prone to running the weed-whacker at 7 AM on Sundays. (By the same logic, yes, if your neighbors make you miserable in your current home, you could spark up a convo with a real estate agent.)
If you’ve got kids, it’s a good idea to consider the effect moving will have on them. They might have to change schools, and even find new after-school friends.
7. Get just what you want
The beauty of a remodel is that you can customize it. You don’t have to be satisfied with someone else’s choices, and you don’t have to pay a premium for another homeowner who has already designed and created a nice space. You can use a personal loan or a home equity loan to choose exactly the materials, accessories, colors, and styles that you want.
*Zillow is a registered trademark of Zillow, Inc.
Kimberly is Achieve’s senior editor. She is a financial counselor accredited by the Association for Financial Counseling & Planning Education®, and a mortgage expert for The Motley Fool. She owns and manages a 350-writer content agency.
James is a financial editor for Achieve. He has been an editor for The Ascent (The Motley Fool) and was the arts editor at The Valley Advocate newspaper in Western Massachusetts for many years. He holds an MFA from the University of Massachusetts Amherst and an MA from Hollins University. His book Krakatoa Picnic came out in 2017.