Should I renovate or move? How to decide

As a homeowner, it’s common to find that your home no longer meets all your needs. Typically, you have two options: sell your home and buy a new one, or renovate your current home. Both options have advantages and disadvantages, including differences in cost and turnaround time.

This Redfin article outlines what you need to know before deciding whether to renovate or relocate. Whether you live in a home in Dallas, Texas or a home in Milwaukee, Wisconsin, here’s how to decide whether to renovate your home or buy a new one.

Important points

If you love your home and neighborhood and don’t want to move, consider renovating. If you need a ready-to-build home, specific features, or a new neighborhood, consider moving. Ultimately, renovating or moving will be determined by your budget and personal goals.

5 factors to consider before making your decision

Moving and Renovation Costs: One of the biggest factors in deciding whether to renovate or move is the cost of each. Renovation costs vary depending on the plan, the age of the house, and the contractor you hire. Moving costs vary depending on local home prices, mortgage rates, and transaction fees.

Adam Johnston of UB Kitchens points out that initial estimates should be treated as a range. “You won’t know the exact numbers until you start bidding. Think of your initial budget less as a set number and more as a comfort zone that reflects what you want to accomplish and what you’re willing to invest. The most successful projects are those where homeowners set clear priorities and made thoughtful trade-offs.”

Housing Market: The local housing market can also influence your remodeling or moving decisions. If there aren’t many homes for sale in your area, or there’s a lot of competition, it may make more sense to stay in your home and renovate it. On the other hand, if you’re in a buyer’s market with lots of inventory and low prices, moving may be more viable. Location: One element of your home that cannot be changed is its location. If you like the area you live in and there aren’t many homes for sale, renovating may be the right choice. However, if you are comfortable living in a new neighborhood or area, you can consider moving. Attachment to your home: Think about how emotionally attached you are to your home and whether that would make moving difficult. If you have a strong connection to your home, you may be able to continue living there while still meeting your needs by renovating it. If you’re ready for a fresh start, moving may seem like a better option. Timing: Evaluate your timeline and goals. If you need more space immediately, such as a growing family, you may need to move. If you can deal with some disruption and have time to wait for a renovation, a renovation could be a good solution.

Which is cheaper: remodeling or moving?

The best way to determine whether moving or renovating is more cost-effective is to estimate the costs of both scenarios.

Cost of modification

Materials and labor: This is the biggest cost to consider. How much material, what type of material, the number of projects, and the number of professionals needed on the team all affect the cost of a remodel. Gray Mullinax, operations manager at Signature Kitchens & Baths in Charleston, explains, “Labor costs often make up 30 to 40 percent of the budget, materials make up 40 to 50 percent, and the rest goes to design, permitting, and contingencies.” Yonatan Asulin, founder of ASL Remodeling, adds: “Structural changes, engineering plans, and major renovations typically drive costs higher. Depending on your choices, you can add tens of thousands of dollars more in finished materials.” Permits: Depending on the scope of your remodel, you may need to obtain permits, which can increase your total cost and time. According to HomeAdvisor, the average building permit costs $1,650. Potential financing costs: If you need to tap into your home’s equity or undergo a cash-out refinance, you may incur additional costs ranging from interest to closing costs. “The amount you borrow should reflect both the long-term value of your home and your personal financial comfort level. The most common mistakes homeowners make are underestimating the total cost, skipping the buffer, and starting construction before the financing is fully secured,” says Bilal Rehman. Going over budget: One of the big risks of remodeling is the possibility of going over budget. “High-cost items like moving mechanical systems or installing custom cabinetry can have a big impact on your budget,” explains Sarah Hilary of Sarah Hilary Interior Design. “Even simple renovations can be costly, and electrical work is often underestimated, especially in older homes without modern lighting.” Antoaneta Bacheva of CPP Builders advises her clients to “set aside a 10-20% contingency fund and invest in detailed pre-construction planning, as upfront clarity is the most important factor in keeping a project on time and on budget.”

Sales costs

Agent commissions: Real estate commissions are negotiable, but you can expect them to range from 1.5% to 6%. Preliminary list of home repairs: This process may include painting, landscaping, and minor repairs. If your home has serious issues that need to be addressed, your expenses may increase. Costs of a new home: There are many costs to expect when you buy, including a down payment, closing costs, and inspections. Moving costs: Moving typically costs around $1,500. Moving far away will also be expensive.

Advantages and disadvantages of renovating your home

Advantages of modification

Renovating can be cheaper: Even though renovating can be expensive, selling your home can be more expensive. You’ll need to anticipate the costs of selling your home, including paying a real estate agent, sales and transfer taxes, and closing costs on your next home purchase. Flexibility and customization: You have the flexibility to choose the projects you want to work on. This will help you stay within your budget. There are also options to customize your home, which may be difficult to find in commercially available homes. No need to move. If you renovate, you can continue living in the neighborhood. This is a huge advantage if you like the location of your home and want to avoid the hassle of moving. Renovating may be faster than moving. Depending on where you live, finding a new home may take some time. This also adds to the time it takes to sell your home. You may be able to save time by modifying it.

Disadvantages of modification

Life during construction: Life during construction can be a pain in daily life. From dust and construction noise to temporarily inaccessible parts of your home, renovations may not suit your lifestyle. You may not get a full return on investment: Not all home improvements are created equal when it comes to increasing the value of your home. The project may be valuable to you, but it may not be to a future buyer. Possible increase in home insurance: When renovating, your home insurance premium may increase depending on the specific project. This varies by policy, but some projects that can increase the cost of your home insurance include adding square footage, major kitchen renovations, and installing a pool. Costs may increase during the project. Renovation budgets are not always fixed. Fluctuations in material prices, change orders, and schedule delays can increase final costs beyond initial estimates.

“Surprises always creep up during renovations, so homeowners should set aside 10 to 30 percent of the project,” said Ken Semler, president and CEO of Impresa Modular. “Kitchens and bathrooms are some of the most expensive spaces, but simple additions don’t cost much, so your renovation budget will vary greatly depending on what you’re building.”

Advantages and disadvantages of moving to a new home

Advantages of moving

New locations and features: If you want to live in a different area, remodeling isn’t the answer. Similarly, if you’re looking for a specific style of home, you may find another home that meets your desires. You can buy a turnkey home: When you buy a turnkey home, you can move in without worrying about an ongoing home improvement project. Predictable budget: Depending on the length and complexity of your renovation, you can accidentally go over budget. Moving allows you to stay within your means.

Disadvantages of moving

Buy and sell at the same time: Buying and selling a home at the same time can be difficult if you’re planning on moving. If you sell first, you’ll need to find a place to live, and if you buy first, you may have to pay two mortgages at once. Moving costs: In addition to buying and selling costs, you should also anticipate moving costs once the day arrives. Sometimes you can’t find what you need. Depending on the local housing market, there may not be a home that meets your needs and desires. Potentially higher mortgage interest rates: If your current interest rate is higher than your existing loan, your monthly payments may increase.