Should I renovate or move? How to decide

As a homeowner, it often happens that your home no longer meets all your needs. Normally you have two options: sell your house and buy a new one, or renovate your current house. There are pros and cons to both options, including different costs and time commitments.

In this Redfin article, we explain what you need to know before deciding whether to renovate or move. Whether you live in a home in Dallas, Texasor a home in Milwaukee, WIHere’s how to decide between remodeling your home or buying a new home.

Key Takeaways

• Consider a renovation if you love your home or neighborhood and don’t want to move.
• Consider moving if you want a turnkey home, certain features or a new neighborhood.
• Ultimately, remodeling or moving depends on your budget and personal goals.

5 factors to consider before making a decision

1. Costs of moving versus renovation: One of the biggest factors that will help determine whether you should remodel or move is the cost of each. Renovation costs depend on your plans, the age of your home and the contractors you hire. Moving costs depend on local house prices, mortgage interestand transaction costs.

Adam Johnston of UB kitchens notes that early estimates should be considered a range: “You won’t get a precise number until you start getting bids. Think of your initial budget less as a fixed number and more as a comfort zone that reflects what you want to achieve and what you are willing to invest. The most successful projects are those where homeowners set clear priorities and make thoughtful trade-offs.”

2. Housing market: Your local housing market can also influence your decision to renovate or move. If there aren’t many homes for sale in your area or the competition is fierce, it may make more sense to stay in your home and renovate. On the other hand, if you’re in a buyer’s market with more inventory and lower prices, moving may be more feasible.
3. Location: One aspect of your home you can’t change is its location. If you love the area you live in and there aren’t many homes for sale, renovating may be the right choice. However, if you are open to living in a new neighborhood or area, you may want to consider moving.
4. Attachment to your home: Consider how much emotional attachment you have to your home and whether it will be difficult to move. If you have a strong bond with your home, a remodel can help you stay in place while meeting your needs. If you’re ready for a fresh start, moving may be a better choice.
5. Time: Evaluate your own timeline and goals. If you immediately need more space, for example with a growing family, a move may be necessary. If you can tolerate some disruption and have time to wait for renovation work, remodeling can be a good solution.

Is renovating or moving cheaper?

The best way to find out whether moving or remodeling is more cost-effective for you is to estimate the costs of both scenarios.

Costs of renovation

• Materials and labor: This will be the biggest expense to consider. How much material, what type of material, how many projects, and how many professionals you need on your team will all affect the cost of a remodel. Gray Mullinax, operations manager at Signature Kitchens and Baths of Charlestonexplains, “Labor is often responsible for 30 to 40% of the budget, materials for 40 to 50%, and the rest goes to design, permits and contingencies.” Yonatan Asulin, founder of ASL renovationadds. “Higher costs typically result from structural changes, engineering plans and major renovation work. Finished materials can add tens of thousands of additional costs depending on choices.”
• Consent: Depending on the extent of your renovation, you may need a permit, which can increase the overall cost and time. According to Home advisorthe average building permit costs $1,650.
• Potential financing costs: If you want to use your equity or get a cash-out refinance, you may incur additional costs ranging from interest to closing costs. “The amount to borrow should reflect both the long-term value of the home and your personal financial comfort level,” says Bilal Rehman. “The most common mistake homeowners make is underestimating total costs, skipping the buffer and starting construction before financing is fully secured.”
• Exceeding your budget: A major risk with a renovation is that you exceed the budget. “Expensive costs such as moving mechanical systems or installing custom cabinetry can have a significant impact on budgets,” says Sara Hillery of Interior design by Sara Hillery explains. “Even simple facelifts can add up and electrical work is often underestimated, especially in older homes without modern lighting.” Antoaneta Bacheva from CPP builders says he advises clients “to set aside a 10 to 20% contingency reserve and invest in detailed planning prior to construction, as clarity up front is the single most important factor in keeping a project on time and on budget.”

Cost of sales

• Agent commissions: You can negotiate real estate commissionsbut you can expect the range to be somewhere between 1.5% and 6%.
• Register home repairs in advance: This process may include painting, landscaping and minor repairs. If your home has serious issues that need to be addressed, that can increase costs.
• Costs of new-build home: From your deposit amount, closing costsinspections and more, there are several costs to consider when purchasing.
• Moving costs: It is average typically costs about $1,500 to move. If you’re moving a long distance, it will cost more.

Pros and cons of renovating your home

Benefits of renovating

• Renovation can be cheaper: Although remodeling is expensive, it can be more expensive to sell your home. You have to anticipate the costs for selling your homesuch as paying your real estate agent, sales and transfer tax, and closing costs on the next home you buy.
• Flexibility and customization: You have the flexibility to choose which projects you want to carry out. This can help you stay within your budget. You also have the option to customize your home, which may be difficult to find in a home on the market.
• You don’t have to move: When you choose to renovate, you stay in your neighborhood. This can be a big advantage if you like the location of your home and want to avoid the hassle of moving.
• Renovations can be done faster than moving: Depending on where you live, finding your new home can be time-consuming. This is in addition to the time you spend selling your home. You may be able to save time by remodeling instead.

Disadvantages of renovating

• Living by building: Living in the middle of construction can be difficult in your daily life. From dust and construction noise to temporarily not being able to reach parts of your home, renovating may not suit your lifestyle.
• May not receive full return on investment: Not all home renovations are equal when it comes to increasing the value of your home. While a project may be valuable to you, it may not be to future buyers.
• Possible increases in home insurance: During renovations, certain projects may lead to an increase in your home insurance premium. This depends on your policy, but some projects that can increase the cost of your home insurance include adding square footage, major kitchen renovations, and installing a swimming pool.
• Costs may increase halfway through the project: Remodeling budgets do not always remain fixed. Fluctuations in material prices, change orders, and timeline delays can increase the final cost above the original estimate.

“There are always surprises creeping in during a renovation, so homeowners should set aside a reserve of 10 to 30% of the project.” Ken Semler, president and CEO of Impresa modularsay. “Budgets for renovations also vary widely depending on what is being built, as kitchens and bathrooms are among the most expensive spaces, while simpler additions can be cheaper.”

Pros and cons of moving to a new home

Benefits of moving

• New location and features: If you want to live in a different area, remodeling won’t solve that. The same goes for if you’re looking for a specific one corporate identityyou may be able to find another home that meets these needs.
• You can buy a turnkey home: Buying one turnkey home you can move in without the hassle of ongoing home improvement projects.
• Predictable budget: Depending on the length of the renovation and its complexity, it can be easy to accidentally go over your budget. Moving keeps you within the limits of what you can afford.

Disadvantages of moving

• Simultaneous buying and selling: If you plan to move, buying and selling a house at the same time can be difficult. If you sell first, you’ll need to find a place to live, or you may have to pay two mortgages at once if you buy before you sell.
• Moving costs: In addition to the costs of buying and selling, you also need to consider moving costs when the day comes.
• You may not find what you need: Depending on your local housing market, there may not be homes that match your wants and needs.
• Potentially higher mortgage interest: If the current interest rate is higher than your existing loan, monthly payments may increase.

Should I renovate or move?

Deciding whether to renovate or buy a home is personal and depends on your finances, goals and lifestyle.

• Renovate as: you love your home and location, have equity and are comfortable with temporary disruptions.
• Move as: you want a different neighborhood, immediately need more space or prefer a turn-key home.