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Renovate or Move: Should I Renovate My House or Move?

Renovate or Move: Should I Renovate My House or Move?

 

Are you considering adding a second or third bathroom? Maybe a finished basement is on your wishlist, or perhaps you’re hoping for that dream backyard. Or potentially gutting your kitchen and starting over with new appliances and cabinets? Whatever remodeling project has been running in circles in your mind recently, know that there are many others just like you who have had the same thought!

According to Houzz.com, the average cost of a remodel in Denver, Colorado is $22,877.

Sky-high costs of homes and interest rates hitting hovering around 6.3 percent are pushing people to remodel instead of selling, regardless if they desire more space or aim for a smaller living area.

For many homeowners, high cost of moving mean staying put and making renovations to their existing homes. This may equate to additions, room makeovers or updating areas that had been delayed for one reason or another.

Top 5 Projects with the Highest Rate of Return

According to the latest Hanley Wood report, the projects with the highest ROI for Colorado are:

  1. Garage door replacement
  2. Manufactured stone veneer
  3. Siding replacement (vinyl)
  4. Minor kitchen remodel
  5. Siding replacement (fiber cement)

The Need for Workspaces, Outdoor Spaces and ADUs

The pandemic undeniably changed the way we use our homes. The focus on viable work areas, useable outdoor spaces, and fitness spaces was the biggest change we saw.

Colorado’s 300+ days of sunshine and low humidity make for perfect conditions to integrate the outdoors with indoor living space. It’s not surprising that a deck addition is ranked #8 in the Hanley Wood report for cost recouped from home improvements.

Another popular home improvement continues to be accessory dwelling units (ADU). Often referred to as granny flats or mother-in-law suites, ADUs provide additional space for a home office, housing for a family member or rental income. According to Housing Wire, “State and local governments – and now Washington – frame ADUs as a prime vehicle to address a U.S. housing shortage that the National Association of Realtors pegged at 5.5 million fewer units than needed.”

Or is a New Home Really the Best Decision?

Renovating your home may seem like a good idea but is it right for you? You’ve probably known people who have undertaken projects who share plenty of horror stories. Common complaints include contractors who don’t show up, delayed shipment of materials, budgets that blow up, etc., etc. Typically, they are happy with the end product but the wear-and-tear their lives take in the process can’t be discounted. Depending on the scale of the home improvement project, there are a number of factors to consider before taking the plunge.

Displacement

Will you have to move out of your home during the renovation and find a rental? Contractors’ timelines can be very ambiguous. What is billed as a three month job can quickly turn into half a year. Are you prepared to extend a lease if necessary? Or extend the lease on the storage facility that’s holding your furniture? It’s critical to understand when materials may (or may not) be arriving and what kind of delays to expect. Those answers may dictate when you actually move out and how long you can expect to be displaced.

Finding a Contractor/Cost of Additions

It goes without saying contractors are in short supply and are booked months and sometimes years out, depending on the job. It’s smart to ask neighbors and friends if they know contractors who might be available, are reliable and do quality work. Keep in mind that when it comes to home renovations, the lowest estimate isn’t always the best. Quality construction, showing up and completing the job are worth the extra cost when it comes to improving your home.

Overruns are a Very Real Thing in Home Renovation

A $15,000 home renovation project can easily double if you aren’t careful. The money you spend on renovations might be better invested in a more appropriate move-in ready house for you and your family. You have to carefully consider how much disruption you’re willing to endure and the amount of money spent with a home remodeling project and if it’s worth the hassle.

You might be better off using that money to upsize and move into a home that includes the features that appeal to you instead of sinking more money into your existing home.

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