Deciding to renovate or to move

[Rebecca]

We've lived in this house 7 years. It's a small home that needs renovating to make it better suit our lifestyle and needs. I'll try to list the pros and cons of renovating versus moving as best I can:

PRO:
*Mortgage is affordable- a big plus
*Lot is a nice size (1 acre, fenced back yard),
*Location is convenient for dh to travel to work and close to shopping/conveniences/friends and family-another big plus
*Basement is mostly finished, we have a playroom, laundry/pantry, my workshop and dh's home office (crude and cold, but it's his own space)
*2 car garage with full attic and basement, good for storage
*Generally doesn't need major work (roof and siding is good, structurally sound, basement is dry, etc)

Cons:
*2 br upstairs, 1 br downstairs is not ideal for small children
*Kitchen is a narrow galley that is a main passage to basement, dining room and outside (both front and back)-my biggest pet peeve-someone is always in my way and it's terribly frustrating and annoying to do anything in there.
*House is located on a very busy/noisy commuter street (45 mph, many large trucks)
*Needs new windows and septic (septic needs to be replaced before we move to bring it up to code)
*Not happy with the school district
*Small rooms with narrow doorways-feels very claustrophobic (though decluttering might help this a bit)
*Probably not the most energy efficient
*Biggest windows are on the north side of the house and face the street (we keep the blinds closed for privacy and heat, and I NEED more sunlight)
*Electrical system needs upgrading- much of it is the original BX cable, but much was upgraded over time
*Industrial park is encroaching ever closer (it's now just one home lot away, and that lot is owned by one of the businesses)


How do we determine whether it's worth it to make major renovations (involving taking down walls to enlarge the kitchen/dining/mudroom into one big space), replacing the windows and septic (we'll need to fix the septic before we sell to bring it to code)? My concern is that we'll price ourselves out of the neighborhood. We live on a busy rural commuter street where traffic whizzes by at 45 mph. We have a new development across the street with big mcmansions on tiny, useless lots that go for $385+. But I'm not sure when I want to move. The process seems daunting and the homes we like would be more than double our current mortgage with much higher taxes. Land is terribly expensive for a few acres too. But I'm not happy with these things about our home now. We don't know how long we'd want to stay here (the affordability is a key factor).

How do we find a consultant who can crunch numbers to determine how much we should spend renovating? Whether we'll get our money back if we sell or not? Or if we should sell our home the way it is now (as a starter home)? How can we get help making the decision?

[eugenemama]

I can't really offer any advice, but we're in a similar situation. We are actually hoping to be able to afford remodling, b/c of all the pros we have for staying in our current house/neighborhood. But we have no idea what we can do legally in terms of adding on. I think a big thing for us will be talking with architects to see IF we can do what we want and how much it'll cost. It's a hard decision, though, huh?

[momto l&a]

Well for us we will add on to our home because we like where we are at but the house is going or maybe it is already too small.

That doesnt help you though your list of cons seems like it might be better for you to find a new roost. Having to keep the blinds closed would push me over the edge. I need a light bright house.

Have you gone house hunting to see how the house market is in your area? Maybe you would find that houses are cheep and you could easily get a house that you would like and that would meet your needs. Than it wouldnt be worth it to remodel your home.

[Kavita]

I can't give you a really comprehensive answer on this one, but I can give you a couple of ideas, because we were recently considering some remodeling too. It seems like it would be hard to make a decision in this situation, because it seems like there are a lot of factors missing in the equation. So right now I might try to get more basic information about each of the various options.

I guess one thing I would do is to talk to a realtor or two. Tell them you are thinking about possibly selling, and have them come over, look at the house and do a market analysis of the neighborhood (what similar homes in the area have been on the market, how much they sold for, how long they were on the market, etc.) Generally they will do this for free I think. Talk to him/her about what you would have to do to sell, and what you think the house would be worth in it's present condition, if you did the basic fix-up (the septic thing), and what it might be worth given the neighborhood value if you did the remodeling you anticipate you would do. Keep in mind that you might not get what the realtor says you should list it as, and that you would be out 6% of the selling price for the realtor's commission, plus moving expenses and closing expenses on the new house.

Also, I would start going to open houses or maybe looking at houses online to get a sense of what homes are available, if you are likely to find something affordable that you like, that meets your needs better.

You can also get an appraisal privately on your own, which will give you a more realistic sense of what the house is worth but will cost you some $.

I would also clarify how much remodeling you would need to do to make you happy with the house itself and if there are ways to fix any of the house problems. (Keeping in mind that as long as you have an adequate number of rooms and bathrooms for the number of people you have, a lot of "this house is too small!" problems too are just going to repeat themselves in a new house, because the bigger the house you get the more crap you will accumulate to fill it up with clutter--it's just the way it works!! It's like some weird law of physics!! Sometimes decluttering and a few new decorative things can make a big difference!) But what would be some options for making the house more liveable? Could the kitchen be remodeled, or maybe even it would be cheaper to move the doorways so it's not a thoroughfare? doorways be widened? Could you maybe put in some skylights or new lighting to solve the darkness issue? Or get some different types of window treatments? I would get several different contractors to come give you estimates--tell them what your problems are about the house, and just see what they come up with in terms of ideas. They might suprise you in terms of what they propose! (I had two people come out and look at my kitchen, and both gave me very dissimilar answers in one respect, but both said the same things about certain other things.) Get bids from them, it will give you a much better sense of what it might cost to do the renovations you would need.

Also, play out some scenarios--if you could wave a magic wand and get the house the way you wanted it, would you be happy with the neighborhood? Do the pros outweigh the cons, or vice versa? Which aspect is the most important to you? Are you willing/able to put more money into another property that might be more valuable in the long run? Or is affordability in the short term more important? How much equity do you have in the house? I would also think hard about how long you intend to stay in this house, or in this area. 2 years? 5-7 years? 10 years? I think this is a critical factor in making decisions about buying any new house or staying where you are at. What is your overall financial plan?

I find loan calculators to be helpful--there are some good refinance calculators or mortgage calculators on The lending tree. com. It can give you a sense of what your monthly payments would be on a new mortgage, and I think they have a home equity loan calculator too.

Hope this all isn't confusing and overwhelming you even more!! Just take your time and get more information step by step about all of the options. Good luck!!

[Kavita]

Oh, one more thing, is that in my understanding it is often cheaper for you to fix something yourself (aka the septic system) and then sell the house for a good price than it is to take a loss on it as a "fixer upper." I think that people either want 1) a decent house that is in move-in condition and doesn't need major work, or 2) a fixer-up that they can get on the cheap. It doesn't sound like your house needs major structural work to make it liveable, just like it needs that one thing repaired. If the electrical stuff is all working, it is not necessarily something that needs to be fixed, maybe just something that could stand to be upgraded. (I have a 1952 home, which is in pretty good structural condition but has some outdated and aging things, so I'm feelin' ya here . . . !)

Maybe one thing that you can do that will help you make the decision is to pretend that you are going to put the house on the market and move in 6 months. (I love hypothetical situation mind games!! I work so much better with a little bit of imaginary pressure! ) Make a list of the things you will need to do to get the house ready to show and sell. This would be any major repairs, plus minor repairs and maintenance (fixing leaking faucets, replacing rusty things, etc.) plus intense cleaning (mineral deposits in the sink and showers) plus minor cosmetic changes that would make it look more appealing. (I know realtors SWEAR by new paint, and just basic stuff like making the house look nice from the street by getting rid of any crap in the yard, planting a few flowers, etc!) For my house the list would look something like this: 1) Clear clutter, get rid of things we don't need anymore, do some deep cleaning. 2) Paint kitchen. 3) Repair/replace kitchen faucet 4) finish landscaping in front yard. Plant flowers in flowerbed. 5) finish landscaping in back yard. 6) Repaint master bathroom., etc. etc. Start doing the things on your list gradually--at the end of the six months, if you decide to REALLY sell you will have a house that is clean and in good repair and has curb appeal and you will be in much better shape to get a good price for your house and you will be able to find a new home for yourself and move with much less stress! Or, you may feel so much happier with your house after it is clean and decluttered and spiffed up that you will fall in love or at least in like with it again and decide to spend some money to do remodeling or renovation to make you like it even more!!

[be11ydancer]

Oh my gosh, I would say just move. Renovation stinks, in my opinion. It's expensive and imposing and messy. It completely stinks. It's what we're doing right now one room at a time and I hate it. Yes, it's nice to pick out paint colors and flooring and doors and such but it just completely stinks that so much has to be done. I suppose if you paid someone to do it all for you, it might be better but then again, contractors can be sketchy and expensive. We've done that in our last house. I. Hate. Renovating.