Remodeling a home can be a great way to make your space more livable and get more value from your property. After all, these changes can make your home better suited to your personal needs or make it more attractive and modern.
But if you are planning on moving out of your home soon, then remodeling may not be the wisest move. Here’s why.
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Remodeling may not be worth the money if you’re considering a move
The sad reality when it comes to remodeling is that it is very rare to get a 100% return on the money you invested — or even close to it. In other words, if you spend $20,000 to put a new kitchen on the property, that’s unlikely to raise the value of your home by $20,000.
It might enable you to sell your house for a little more than you would have if you had a dated kitchen. But even in a best-case scenario, you’re not likely to get more than about 50% to 60% of the money you spent back in terms of how your remodel affects your home price.
And, in many cases, a remodel or upgrade will provide an even lower return than that. That’s especially true right now when lumber and material prices are high and construction projects are more expensive than normal due to materials shortages.
You also have to consider that buyers may not like the remodel you did — especially if you make it very taste specific to you. And if you’re over-improving your house compared to other properties in your neighborhood, a remodel is even less likely to pay off since many people prioritize location and want to live in a place with homes that are somewhat similar in terms of finishes and fixtures.
Of course, if you are going to stay put in your house for a long time, then you may not care that you don’t get a very good return on your investment when you remodel. After all, you’ll get the benefit of enjoying the upgrades while you live there and chances are good your primary purpose won’t be improving your home’s property value.
But if a move is impending, you may be better off just sticking with the status quo — unless there are serious defects or safety issues in the property that could make it impossible to find a buyer at all.
That’s especially true if you have to borrow to remodel. You don’t want to be stuck paying off a personal loan for remodeling costs for a home you no longer live in. And you definitely don’t want to end up owing more on your mortgages than your home may be worth just because you took out a home equity loan or line of credit to fund your project.
The bottom line is, you need to consider whether making the investment in remodeling your home is worth the enjoyment you’ll get out of it, and if you’re moving soon then that’s likely not going to be the case.