Should You Remodel or Move?

Dec 5, 2021 | Tips | 0 comments

Should You Remodel or Move?

Should You Remodel or Move? If you’re asking yourself if you should remodel your home or just move on to a new one, there are probably a few things about your home you don’t love — and that’s no surprise. No home is perfect! But when you’re asking yourself that question, you’re really asking: Can my dislikes be changed with a remodel? Would that make financial sense? Is remodeling worth the hassle?

Should You Remodel or Move?

With low inventory nationwide, more homeowners are renovating their current homes instead of moving. According to Zillow research, 76 percent of Americans surveyed would rather use a set amount of money to upgrade their home to meet their needs rather than use it as a down payment on a new home.

Everyone’s home, budget, real estate market and priorities are different. So, settling the remodel-versus-sell debate always varies, depending on who you ask. But, if you’re trying to make the decision for yourself, follow these five key steps.

1. Determine whether remodeling or moving is more cost-effective

You’ll incur costs no matter which path you decide to take, and what makes sense for you might not make sense for another homeowner. For some homeowners, moving is cheaper. For others, it makes more financial sense to renovate the house they already have. To find out the more affordable option for you, make sure to consider all possible expenses in order to make an accurate side-by-side comparison.

Should You Remodel or Move?Costs of selling

Most sellers are focused on the profit they’ll make when they sell, and they sometimes overlook all of the expenses related to selling. Keep in mind the following common expenses.

Agent commissions

If you’re selling with a full-service listing agent, and if your buyer is using their own agent, be prepared to pay 6 percent of your sale price in agent commission. You can cut back on some of these expenses by using a discount broker, but you’ll have to do much more of the work yourself.

Moving costs

Whether you’re doing a DIY move (and paying for boxes, storage and a rental truck) or a full-service, cross-country move with a professional moving company, everyone pays moving costs in one way or another.

Minor repairs

Even if you’re not planning on making any sweeping changes to your home to get it ready for listing, there are always touch-ups and minor repairs that need to be done so your home can attract buyers that will pay your desired asking price. According to Zillow research, U.S. homeowners spent an average of $6,570 getting their homes prepped for selling. This includes things like carpet cleaning, painting, lawn care, staging and cleaning.

Cost of a new home

Unless you’re deliberately downsizing, you may be considering trading up to a more expensive home. If you decide to sell instead of remodel, and if you want to stay in your same neighborhood or a comparable one, you may find yourself spending more money when you factor in the down payment, monthly mortgage payment and taxes.

Upsizing cost

Another often overlooked factor to trading up is the cost of both utilities and maintenance, compared to your old home. More square footage? Expect to spend more money heating and cooling your home. Moving from a condo to a single-family home? You’ll probably spend more in lawn care and exterior home maintenance.

Costs of remodeling

Should You Remodel or Move?Compared to selling, the costs associated with remodeling are a bit more straightforward. It’s all about how much the renovation is going to cost you when all is said and done. And speaking of costs, you’ll want to make sure you set a budget and avoid overspending on the room you’re remodeling. Here’s an example: If your home is worth $200,000 and your kitchen is 10-15 percent of your square footage, you shouldn’t spend more than $20,000-$30,000 remodeling it.

The first step in figuring out how much your renovations will cost is to get an estimate (or three) from a contractor. Make sure you have a specific estimate for each of the following items.


Depending on regulations where you live, you won’t usually need a permit for interior cosmetic fixes, like painting or refinishing floors. But you probably will need a permit if you’re making structural changes, adding square footage, or making updates that involve plumbing or electrical. Also, if you live in a community that regulates the look of your home’s exterior — like paint colors — you’ll need to check into permits and restrictions. In general, your contractor should know which permits are required based on the work you’re requesting.

Architectural plans

When you do a project that requires a permit, you’re often also required to submit architectural plans to the city, so make sure to account for these costs. And if an HOA board is reviewing your renovation plans (say, if you live in a condo), you may need to submit plans to the board, even if the city doesn’t require them.


The materials you choose for your renovation project can dramatically increase the cost of your renovation. Dreaming of an upscale kitchen with quartz countertops and custom cabinetry? It’s going to cost a lot more than laminate countertops and builder-grade cabinets. And make sure you decide on exactly what you want before construction starts. If you change your mind mid-project, it’ll cost you.


If your upgrade is anything more than a small DIY project, you’ll probably hire a professional, whether that’s a plumber, electrician, landscaper or general contractor. Labor costs can add up quickly, so keep an eye out for costs you haven’t planned for, like demolition, or time-intensive requests, like intricate tile work.

Additional expenses

You’ll want to plan ahead for other renovation-related expenses, like a hotel room if you need to temporarily vacate the home for major work, off-site storage space if you’re refinishing the floors, or dining out if your kitchen is unusable.

Financing costs

You should also decide how you’re going to pay for the remodel. If you’re not paying in cash, calculate how much you’ll pay in interest and how it will affect your finances in the long term. Some of the most common ways people pay for renovations are:

  • Refinancing: Depending on your current interest rate, you may be able to refinance into a lower rate, which could help you save for renovations.
  • Cashout refinancing: If you have enough equity, you could consider doing a cash-out refinance, which lets you refinance at an amount higher than what you owe, essentially giving you access to some of the equity in your home without selling.
  • HELOC: A home equity line of credit (HELOC) is a revolving line of credit secured by the equity in your home. You are charged interest on the amount you use, much like a credit card.
  • Home equity loan: A bit different than a HELOC, a home equity loan (also called a second mortgage) is a loan you take out on your home, in addition to your existing mortgage.

Hidden costs

No home renovation project is without hiccups, so always factor in a cushion of between 10 and 20 percent, just in case you uncover unexpected issues along the way.

2. Research your real estate market

Your local real estate market, and even your specific neighborhood, can make a difference when it comes to deciding whether to sell or renovate. If you live in a hot real estate market, it may make more sense to sell. Here are a few ways to gauge the state of your market:

  • Research the area: Recent comps should help shed light on what you can expect to sell your house for.
  • Assess your home’s marketability or appeal to buyers: Does your home need a lot of work before listing? A home in good condition usually sells faster than a fixer-upper, even in a sellers market.
  • Speak with an agent: An experienced local agent can give you an expert opinion on what your home would sell for.
  • Consider the neighborhood you’re moving into: If your home has gained lots of value but you want to move to a new house in the same neighborhood, keep in mind that those homes have gone up in value, too, so your equity might not go as far as you think.


3. Evaluate your emotional attachment to the community

There’s more to your sell-versus-renovate decision than just money. If you’ve put down roots in your current neighborhood, moving might not be the best idea. Consider these factors:

  • Kids: You’re in a desirable school district, and your kids have friends and activities nearby.
  • Sense of community: You like your neighbors and have good rapport with the community — that can be hard to find.
  • Distance to work: Your commute time is low, and a move might require a longer commute.
  • Activities and fun: Your favorite restaurants, shops, parks and activities are nearby.
  • Family: You have family nearby, especially if you count on them for child care or if you have an elderly relative to care for.

Should You Remodel or Move?

4. Consider your timeline needs, whether you want to move or improve

When you decide to move and once you get an offer, the timeline is pretty much set, with the exception of an unexpected change to the close date. Get a feel for the average time it takes to to sell a house by observing your local real estate market. The biggest question mark is typically how long it’ll take to get an offer. Once your home is under contract, you should be able to predict the time to close with relative certainty.

But remodeling requires more patience and flexibility. Your contractor might tell you the renovation will take eight weeks, but could then end up extending it if they run into changes, issues or delays.


5. Be realistic about what a renovation will solve

It’s easy to think that a remodel will solve everything you don’t like about your home, but in reality, it’s not a magic bullet. There are some things that a renovation just can’t fix.

  • Neighbors: If you have loud or inconsiderate neighbors, no renovation project can make them move away.
  • Unfavorable school district: If your kids go to public school, you’ll have to send them to their neighborhood school, unless private school is an option.
  • Home type: If you’re living in a condo but what you really need is a single-family home with a yard and a garage, that’s not something that can be fixed with a renovation.
  • Square footage: Here’s one more piece of home renovation advice. Adding square footage to a home can be really expensive — and that’s if the city will permit it and if your lot is big enough. If you need a home much bigger than the one you’re living in now, moving may be more cost-effective.


6. Calculate your remodeling return on investment (ROI)

Of course, you’re renovating your home so you can enjoy living in it, but someday you’ll probably want to sell, so factoring in how much of your remodeling budget you’ll recoup at resale is important to deciding if you should remodel or sell.

One helpful tool in calculating which renovations will give you the most bang for your buck is the 2018 Cost vs. Value Report, which can be filtered by region. Search through 21 common home improvements to find the ones that will be the most worthwhile in terms of resale value. In the tables below, we’ve chosen mid-range improvements — renovations with middle-of-the-road materials, not luxury finishes.

Most cost-effective mid-range home improvements

Project Cost Resale ROI
Manufactured stone veneer $8,221 $7,986 97.10%
Entry door replacement (steel) $1,471 $1,344 91.30%
Deck addition (wood) $10,950 $9,065 82.80%
Minor kitchen remodel $21,198 $17,193 81.10%
Siding replacement $15,072 $11,554 76.70%

Least cost-effective mid-range home improvements

Project Cost Resale ROI
Backyard patio $54,130 $25,769 47.60%
Master suite addition $123,420 $69,807 56.60%
Major kitchen remodel $63,829 $37,637 59.00%
Bathroom addition $44,717 $26,769 59.90%
Deck addition (composite) $17,668 $11,239 63.60%

When to prioritize personal needs

Your ROI is important, but so is your happiness, so keep that in mind when deciding on your renovation project. If you love to garden and would get endless hours of enjoyment out of a backyard greenhouse, but it’s not likely to be a feature that appeals to the majority of buyers down the road, that’s OK — you should enjoy your home while you’re living in it.

7. Understand the risks of over-improving

If your tastes have outgrown your local market, it might be time to consider a move. There are financial risks in creating an extravagant luxury home in a mid-priced neighborhood — when it comes time to sell, you’re unlikely to recoup very much of the money you put into the project.

Should I remodel or move to a luxury home?

If a top-of-the-line, luxury or custom home is what you’re dreaming of, you might think twice before renovating your existing home, because there’s a financial risk in over-improving for your area.

Unless you live in a pricey neighborhood already, you can easily over-improve your home, which means that when you go to sell it, you’re unlikely to recoup much of your cost. If you want that high-end home and you can afford it, you might be better off moving into a luxury home in a neighborhood where the market can support the price.


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Ana Roque is a Brazilian Licensed Realtor at Re-Connect, LLC with 16+ years of experience in the Real Estate industry.

Ana speaks 3 languages (Portuguese, English, Spanish), Wife, Stepmom, Journalist, Event Director for the National Association of Hispanic Real Estate Professionals (NAHREP) Central MA Chapter.