If you’re at a point in life when you’re considering a move or plotting a major renovation to add square footage to your home, you need to consider all of the pros and cons before taking the next steps. With favorable interest rates and home prices, it might be a good time to buy. Alternatively, it might be a bad time if you want to sell.
And, if you’re like most people, you’ll probably need to use much of the proceeds from the old home to finance a new and grander purchase. Maybe a home renovation is what’s needed to take your current residence and make it truly your own.
Here are some other factors to help you decide what the best plan is for you:
Look at Mortgage and Home Equity Rates. If you’re seriously interested in making a purchase or upgrading your current space, now might be a good time, in terms of mortgage rates. Talk with a mortgage representative to get a gauge of the market, the types of loans available, and the various loans available to tailor the financing to your personal needs for the short and long-term. Don’t forget to consider the mortgage interest expense deduction on your tax forms.
Do Your Homework. Take the time to consult with reputable contractors, as well as area realtors. Look to the experience of your family and friends who may have made major improvements to their homes. Try to get a realistic picture of the cost. And, remember that whatever the estimate is, it will end up being a bit more. When you talk with a top realtor in your area, make sure they are well aware of your desire to sell, as well as to make a purchase. One of the main stumbling blocks in selling your home just could be the area in which you live. Ask your realtor how long it’s taking to sell properties, and you just may find out that homes in your area are simply not moving.
Remember that Location is Key. A move could be the opportunity to wind up in a much better spot. For example, if you’re lamenting the lack of a cultural arts scene, water view or walking trail in your hometown, the time to pack could be right. On the other hand, if you’re deeply connected to your current community and the people on your block, you simply may want to move to a new home but remain in the area.
Consider Future Plans for the Property. Make sure the move or improvements you envision will be one you’re comfortable with over the long term. On the other hand, unless you plan to stay a long time, don’t make major changes to your property, without considering how they could affect the resale value. An added feature could help distinguish your house from the crowd. However, a “too large” improvement may not add that much value to the property versus the cost you put into it.
Some changes that you see as improvements could limit the number of buyers later. A prime example is an in-ground pool. What may seem like a great recreational idea to you may be viewed as a maintenance nightmare to others — or a hazard for families with small children. Then again, in some parts of the country, an in-ground pool is expected. Ask a trusted realtor or real estate appraiser how a major improvement will affect your ability to sell later.
Don’t Get in Over Your Head. Make sure you’re motivated by the right reasons. Don’t let a home renovation or purchase get out of control. Whatever decision you make, consider your total investment portfolio, your family and work situation.