At some point in homeowners’ lives they likely contemplate moving or renovating their home. Both involve significant financial implications. It’s not always a clear-cut decision which way one might go. Also, neither is one way or the other necessarily the right or wrong way to go. There’s a myriad of factors to consider in making such a decision.
Let’s look at three important ones.
Do you like your neighbourhood?
If where you live doesn’t work for you, it can be one of the most important factors to consider. Perhaps your commute to work is too long and you’re spending too much time in a car or on train into the big city. Perhaps your street has too much traffic. Maybe you have children and it’s not convenient that there isn’t a park close by. One unfortunate possibility could be that you have a few bad neighbours. That can add all sorts of unwanted stress.
On the other hand, you might absolutely love your neighbourhood and can’t imagine not living there. We’re creatures who love to be happy. All sorts of things make us happy. Having good neighbours, loving the amenities that are close by, having a short commute to work, or maybe you’re lucky enough to walk or bicycle to work. Perhaps your children have grown up in your home and have lots of friends close by.
One would never want to discount the financial implications of moving or renovating, but one usually can’t overlook the impact of living in a neighbourhood you like or don’t like.
Does renovating or moving make more financial sense?
Let’s be clear, we’re not implying that because one option is more or less expensive than the other that it makes more financial sense. It may make more financial sense at times to go the less expensive route, or it may make more sense to go the more expensive route.
We’ve completed major renovations for homeowners that definitely cost them more than it would have to move to a new and bigger home. They had other factors, such as loving their neighbourhood, that made more financial sense to renovate. Sometimes, there’s a price that can be put on happiness, and it may just tip the scale towards the more expensive option.
That being said, sometimes, the cost of renovating cannot be justified. Even if you love your neighbourhood, it may not make sense in your case to spend a larger amount on renovations. We can’t overlook the importance of the financial return on a renovation investment. Other times, the cost of moving is significantly higher than renovating and cannot be justified, even if you don’t particularly like your neighbourhood.
Will you have enough space in your renovated or new home if your life situation changes?
In North America we’re privileged to have more space than in most parts of the world. We tend to need more space to feel comfortable. In many parts of the world the density per household and per square foot is much higher. We’ve grown accustomed to space. When you’re deciding to invest in your renovation, will it allow you to have enough space if your family grows, either by having children, or more children, or perhaps by taking in more family members such as parents.
Which option will ultimately make you happier?
By now you’ve likely figured out that, even though financial implications are important, they’re not the only ones to consider. We all want to be happy. Does moving to a new home in a different neighbourhood help make that happen for you, or does investing in your existing home have a greater chance of happiness. The answer to that question is filled with complexities. Will the financial stress of either decision add too much stress? Will the anxiety of staying put or moving add too much stress? Each homeowner’s decision-making process will be different and they will value certain criteria over others. It’s important to gain a deeper understanding of what you value, of what will make you happier.
If you’re considering renovating your home or adding living space with an addition don’t hesitate to connect with us.
We’d love to be part of helping you be happy.