Last year Americans spent $152 billion remodeling their homes, according to CNBC. However, while millions of homeowners splashed their cash enhancing their properties, 5.5 million homeowners said goodbye to their existing property by selling it, reports Statista. So, if you yearn for more space for your growing family, how do you choose whether extending your existing family home or upping sticks and putting your property on the market is financially wiser?
Have you got cash tied up in your property?
In the past year, the average amount of equity in American homes increased by $16,000. Therefore, millions of homeowners have ample opportunity to extend their current home by utilizing the cash held within their property. Older individuals should consider taking out a reverse mortgage in order to receive a lump sum of cash to use for their home improvements. Releasing equity from your home is beneficial as your monthly repayments are unlikely to increase, which is unlikely to be the case if you take out a larger mortgage on a bigger property. However, it is worth bearing in mind that you’ll need to find temporary accommodation while the work takes place, or, live around it until completion.
Getting more for your money
There’s no denying that property prices across America are high. But, there are locations which are far more financially friendly than others. According to 24/7 Wall Street, Hawaii is the most expensive state for homes, with the median price of a property there coming in at $485,000. So, if you live in a state with costly house prices, you could be substantially financially better off by moving to a cheaper state, such as West Virginia, where the average house price is $122,550.
Adding value to your home
Most Americans aren’t keen on moving home. Washington’s Top News reports that 62% of homeowners don’t plan on ever moving, while 17% say they won’t move for at least five years. With homeowners so keen to stay put, it makes sense to make your home the best it can be while increasing its value too. By building an extension, you’ll be making the total square footage of your property larger, thus its value will increase. But, if you’re considering moving into your ideal home instead, the opportunity to enhance its value may be limited if no remodeling work is required. As a result, your return on investment will be minimal.
Buying a home tends to come with fewer hidden costs than a remodel does. When purchasing real estate, legal fees, inspection charges, and moving costs can all be budgeted for. However, when it comes to remodeling anything can happen which could hike the total cost up. For example, the average kitchen remodels costs $22,145, according to CNBC. However, order cabinets in the wrong size or misjudge the number of tiles you need and your costs will rocket.
When you need more square footage, it’s wise to carefully consider the financial implications of both renovating your existing property and moving into a new one. Both options come with their pros and cons, therefore, thorough checks and costings should be completed.