Over the years your house probably hasn’t changed much. However, you most likely have. Maybe it was your starter home, and now your family has outgrown it. Or perhaps all of your children are grown and have flown the coop. Whatever the reason, you know that something has to change. The question is should you stay or should you go? There is no right or wrong answer. This decision is based on your view of the house and your needs. Here are some things to consider before you make your final decision around money and disruption:
- Is staying in your location really necessary?
- Do you have the budget?
- Does the floor plan need changing if I relocate?
- How much temporary disruption to my lifestyle can I handle?
- Will renovations increase your home’s value?
- What’s your long-term plan for the home?
- How does moving affect property taxes?
- What effect will this have on my mortgage?
Once you’ve answered these questions, you may be leaning more toward one option over the other. If you’re still unsure, here are some pros and cons to both choices.
You have the opportunity to begin new! The chance to meet new people, move away from something you don’t like. It may be the opportunity to change your everyday scenery.
Perhaps you want to move, but don’t want to sell. You can use the house as a source of income by renting it out.
Maybe now is the time to consider renting? See our other article relating to the benefits of buying or renting a home.
Maybe the house you’re leaving is too large or too small now. Relocating gives you the option to find the house that suits your needs now.
When you move, clutter and useless items can be discarded.
Generally, you don’t pay capital gains tax if you sell the home you have previously lived for more than a year. However, if within this period, or if its not your primary residence, you will be up for some taxes if you sell the property. Additionally, you can’t claim income tax deductions for costs associated with buying or selling your home. Most states charge stamp duty when you buy a property, including a home.
When you relocate houses, it is known to be a very stressful activity. Something that may not be needed at this time in your life. There are costs to loading everything into a truck; whether it’s for moving across the street or town. Moving causes disruption in our lives until we develop a new routine.
If you decide to sell your home, the process could take months, leaving you with more expenses. Money can be “tight” if you’re stuck in this position.
Remodelling allows you to recreate an old space into something new, by giving it new life.
If you could consider taking on one room at a time, there is no large upfront cost. You can update what you need so that it fits within your budget. You don’t have to renovate everything, just what you want. There’s also the chance to take on some of your renovation in a DIY fashion.
Your individual needs are met when you renovate. Whereas buying a new home may have a few features you want, but not all the features.
You already have a comfort level for the house and how everything operates within.
If your home needs a complete overhaul, wouldn’t it just be easy to buy something already built with most of your needs?
Is the investment worth it after you crunch the numbers, particularly when you are looking at renovating the whole house?
If you don’t have the cash, remodelling can require a homeowner loan, which generally is loaned at a higher rate than a regular home loan. You would need some equity or security. It may be difficult to get approved.
Depending on what you’re changing in the house, you may have to get building permits particularly if some structural changes are needed.
Remodelling means your home will be in shambles for days to weeks as the rooms are updated. You can spend some extra money to stay in a hotel or stay in your home. If you choose to stay at home, it will be noisy and a bit stressful, it also requires a lot of patience.
Your daily routine is disrupted because of the construction.
Whether you choose to stay or go, be sure to get the finances, paperwork and appropriate professionals lined up before your proceed.
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