16 Feb Six Reasons Why It’s Better To Just Buy A Home Than Renovate
If you watch any home and garden shows or read any decorating blogs, one would think everyone is on a remodeling kick. Same for the check out line, just look at all the DIY magazines. Recently, I had an extended wait at the doctor’s office and they had the TV tuned to HGTV in the waiting room. Show after show was playing about renovating houses, adding bathrooms, finishing bonus rooms, making room for your parents to move in, and on and on.
Of course remodeling makes sense in a lot of scenarios, especially if you love where you live. However, selling your home and buying something else also makes a ton of sense…..and in many cases it’s just a plain smarter decision. So, today, I want to give you 6 reasons why it might make more sense to sell your home than to renovate it. The real estate market is different across the country and each area has its own trends, so not every one of these will be true for you – but here in the Lowcountry, selling and buying a different house is the way to go for a lot of people.
Why You Should Buy!
Let’s look at six reasons why you should just buy a house:
1. Remodeling Is Stressful
Let’s just start right here! When it comes to your house, not too many things are as aggravating and stressful as building or renovating your home. Sure it looks nice in the end…..if you make it that far. When you take on a huge remodeling project, the pressure is on. You have contractors to hire, choices to make, colors to pick….and then make new choices because the first two options usually don’t work or are too expensive. Have you ever lived in a house while it was under construction? Your life is turned upside down dealing with the construction, clutter, debris, where to put your stuff and having people always around as you try to go on with life.
Another big issue with remodeling has to do with how busy the new construction market is. This is now rampant in many areas of the US. Contractors involved in the new construction side of things have no want of work right now. In fact, the construction industry is so busy that even horrible contractors have too much work!! What does that mean for you? Well, it’s slim pickings when it comes to finding a reputable and reliable contractor to handle your project. This alone should give you pause about taking on a renovation.
2. Renovation Usually Offers A Low Return On Investment
This is a surprising fact many homeowners don’t realize. One of the most searched real estate phrases is “will remodeling raise my home value”. The short answer is no, most renovations do not impact a home’s value substantially. While there are many factors that go into what a home will sell for, you are still bound by what the comparable sales are in your area for a similar house. When home shopping, having new floors or a remodeled kitchen will sway buyers in your direction, it doesn’t always mean you get back all that money you spent. Remember, many homebuyers EXPECT the homes they are shopping for to be in good condition and be in-line with current design and decor trends.
The one way this can work in your favor is buying a home that needs to be renovated. When selling, a big renovation will not add to the bottom line, but an outdated home that needs work will always sell for less. Potential homebuyers quickly knock a home out of contention when they walk in and are faced with worn floors, dark kitchens, and a bathroom from the 1970’s. If you are up for the stress and challenge, you can really come out ahead by tackling this type of scenario.
3. Remodels Are Difficult To Finance
One thing that never comes across on HGTV or in a home and garden magazine is the actual mechanics of financing a huge renovation. Let’s face it: getting a HELOC or line of credit to do repairs on a home is a lot tougher than it was before the market dip in 2011. Loans for repairs and remodeling carry a much higher interest rate than a fixed mortgage, it is more difficult to qualify for them, and the lending institutions have a lot more requirements on the type of work and who performs it. Some bank loans for renovations require all contractors to go through a background check and many get an appraiser involved to ensure property values will be in-line upon completion.
Some contractors and large renovation companies actually offer financing options, but these are usually done through third-party lenders similar to credit card companies. You are enticed with low interest or no payments during the renovation only to find out you signed up for a balloon payment or high interest rate after an initial “honeymoon” period. If you can’t pay outright for the work, a large project could be fraught with financing perils.
4. 2021 Will Be A Great Year To Buy
Probably one of the best reasons to buy a new home is that this year is shaping up to be another awesome time to get your new dream home. Several factors are combining for that perfect situation. One, new construction is still on the rise, which expands the choices someone has when buying. With the option of easily buying a newly constructed home, someone has to think long and hard about spending money on an older home. Many new construction homes here are really embracing energy savings and technology. Most newly built homes today come standard with door cameras, connected thermostats, ‘smart’ smoke detectors, built-in wifi, and many come with ‘smart’ appliances that work with Google Home and Amazon Echo.
In the energy efficient category, appliances built in the last 3-5 years are so far advanced from just a few years ago, more reliable than ever, and cost 25%-40% less to operate. Add that to higher quality insulating materials like spray foam and self sealing house wraps, and you have a home that will be less expensive to own and operate than something that was built even just 5 years ago.
A big area that can really make it easier to buy a home today is the actual technology of selling a home. Homebuying has become so advanced, making it easier than ever for potential buyers to shop, research, customize, and even obtain financing all from their tablet or smartphone. Long gone are the multiple weekends spent driving around looking at properties just to narrow down the list to a few. Now with video walkthroughs, 3D renderings, and tons of data about a home online, you can get to your top choices without ever leaving your kitchen.
Lastly, when it comes to the ease of buying a new home, closing times are shorter than ever and mortgage rates are still very low. This helps in making the whole process less of a hassle and easier to manage.
5. Changing Needs
Another reason it just makes more sense to buy a home is the evolving and changing needs of your family. Do you still need a five bedroom house now that you’re empty nesters? Is it getting tougher to make it up those flights of stairs? Or, is another bedroom needed with baby number three on the way? How we use our homes today has evolved over the last few generations and what once worked for our parents might not be how we live today.
Sometimes we just want a change of pace or new surroundings and only moving to a new home will satisfy that desire. There’s certainly not an easier way to change the scenery than move to a new neighborhood, city, or even a new state. If you ever thought about ditching the cold weather and heading south, this may be the year to do it!
6. Moving Can Save Money
Many of our northern neighbors have seen property taxes skyrocket in the last several years and now new tax laws are changing what can (and can’t!) be deducted on your tax return. These factors can now make what was already an expensive place to live seem absolutely outrageous! Picking a new place to live such as Hilton Head Island could save you a substantial amount of money in taxes while enabling you to buy more home for your money. Moving here just makes sense!
Even here in the south we have seen a bump in the cost of living. Property taxes are based on many variables such as square footage, bedrooms, acreage among others. As we mentioned above, if your house is bigger than you need, you might be paying a lot more than you have to.
Another reason some of the newer homes in the area can seem so appealing is the energy tax credits for an energy efficient home and “green certified” buildings. Coupled with cheaper closing costs, beneficial financing, and lower taxes, you could see a large savings compared to your current home.
Let Us Help You Make The Right Choice!
However you have come across this article, you have probably been thinking about moving. We have only begun to scratch the surface on all the benefits there are to moving to a new home, yet there are still some other enticing reasons to make the decision. Remember, location is still a number one priority for most. Maybe your job is in a new area, maybe you can work remotely now, maybe you want to be closer to family and friends, these are all important factors to consider.
So, if you have been considering a large renovation or spending your dough on a major facelift of your home, maybe you should hit the pause button and think through some of the points mentioned above. Better yet, you should get the professional opinion of a local real estate agent who can guide you through the pros and cons of staying put, or moving on out! There knowledge and expertise to help you navigate the market and, more importantly, make a wise decision.