Should We Move and Buy, or Stay and Renovate? 5 Key Questions
While interest rates are having a big impact on most people’s answer to this question these days, it’s still front of mind for many people:
“Is the house where we’re living now where we should stay? What is possible in a renovation? Can we afford it? Do we want the hassle?”
“Should we just sell this one and buy another one that suits our needs better?”
Most people have to consider all of the above!
Over the last 20 years of my career on both the construction side and on the architecture side [and also on the ownership side, both as an investor and with my own home], I see folks completely stymied by this decision over and over and over again.
It’s why I started a consulting business, where I talk with people one-on-one about this exact decision and how to navigate it - because there is *such* a need for help with these questions.
So this newsletter edition is a little taste of what I discuss with folks in those sessions. When I meet with folks, I help them look at these questions from a variety of angles, including the emotional side - homes aren’t just financial investments, they’re where we raise our families and make memories!
Ok, let’s dive in.
Here are 5 key questions to ask yourself:
Question 1: Is this your forever home?
I know, I know…this is the exact question you’re trying to answer, why am I repeating it? Well, if you start to outline the reasons why you might stay or go, they can usually be put into two buckets: stuff you can change, and stuff you can’t change. For example:
stuff you can’t change
location - street, part of town, rural/urban/suburban, etc
proximity to things you care about - restaurants, kids’ friends, grandparents, etc
zoning ordinance and size of lot - this impacts your ability to do renovations or additions
school district
specific/unique needs you may have - child with disabilities, etc
Stuff you can change
almost everything else!
Some things are harder than others to change - your financial situation, say, or your lifestyle - but they’re more possible than airlifting the house to a whole ‘nother part of town!
So if you’ve got a house you’re not too thrilled with, but the location is perfect, and it’s got room in the zoning to allow you to add on, and your budget can support that, well, it’s much more likely that it’s a “forever home.”
When you contemplate whether a home is a “forever home” or not, picture yourself at different stages of life. It can be hard to look past today, but your toddlers will be teenagers before long, and soon after that you’ll be in an empty nest…will the house support all those changes and phases? What are you willing to compromise on, what are the “unchangeables” for you?
And finally, if your head is swirling with all these thoughts, take a moment, close your eyes, and picture your ideal life with your family. What does it look like? If you’re picturing a bustling city life with your kids playing with the neighbors and running down the block to school, but you’re living in car-dependent suburbia…you might consider a change.
Life is short, do whatever you can to build it in a way that suits your family’s vision and needs.
Question 2: What’s your financial picture?
Ok, now that we’ve had fun with the vision…time for money talk! I’m sure you’ve already considered this, but let’s dig a little deeper. Of course, start with what you can afford - do you have cash on hand? Is there enough equity in the house that you could access?
Come up with a lump sum number [and/or monthly payment if you’re financing] that feels comfortable for you and your budget. Now, be ready to discuss that number with professionals. The good ones will ask you! They want to know what the scope of your project is, and what you’re hoping to spend, so they can help you see if there’s a mismatch there.
Let me say this again.
You *must* be prepared to talk about your budget number. Many times, owners say to me “but I don’t know what things cost!” That doesn’t matter. Just because you know the cost of a Ferrari or a Ford doesn’t change what you have available to spend on a car! Tell me your number, and I’ll help you see what you can get for that.
Sometimes owners say “but if I tell you my number, you’ll spend it all!” Well, yeah, I will - because I assume you’re telling me a number you’re comfortable spending! Notice: I’m asking you for “your budget for this project” not “all the money you have so that if you spend all of it you’ll be super mad and can’t afford to pay your bills.”
For more on this topic, here’s a full post I did recently.
Let’s talk about something else that comes up a lot: “home value.” Most people understand that you shouldn’t spend more on renovating a home than the home is worth, but what does that mean exactly?
Well, a home is “worth” what buyers are willing to pay for it, given whatever market conditions are at the time you’re trying to sell. It doesn’t matter what you put into it - there’s no magic guarantee that a buyer *must* pay you more for your house just because you added a bathroom.
But let’s step back - if this is a home you’re going to live in for many years, why do you care what a buyer would pay for it today? Unless you’re selling it today, that doesn’t matter. Now, being upside down with big loans over appraised value in a hot/cold market isn’t good either, so of course prudence is warranted. But generally, the longer your ownership horizon, and the more stable your local housing market is over time, the more flexibility you have.
Go ahead, spend a bit more on the fun tile - in 20 years when you sell, they’ll be ripping it out anyway to do their own thing. There’s no such thing as predicting what a buyer in 20 years will want, just don’t do anything super weird like move the kitchen to the attic.
Question 3: What potential does the house have?
This one is fun! Look around - can you see areas to make easy improvements, like removing a wall or adding some windows? Is the yard big enough that an addition would fit nicely? Are you the smallest house in the neighborhood, so adding on or doing a big renovation would bring you [and your house’s value] up to snuff with the neighborhood? Are there hidden finishes, like hardwood floors or trim details or cool old fireplaces, that just need some love to reveal the house’s character? Is it a blank slate, that you can bring a lot of personality to?
If you’re excited to bring out the potential of your existing house, that’s a big check in the “you should stay and renovate” column. Even the most run-down and tired of homes have potential…though of course with some, we have to work harder than others to bring it out!
Question 4: Do you even *want* to do a big project?
If you’ve gotten all the way to this question, and you’re thinking, ok yes, it does make sense to stay where we are and renovate…but the thought of tearing your home to pieces, moving out for a year+, having life completely disrupted, etc etc gives you hives, well…a big renovation may not be for you.
It’s ok to be anxious and overwhelmed - all my clients are at different times, it’s completely natural! But if you’re in absolute dread, or you know yourself and you know you would just really, really hate the whole process…don’t inflict that on yourself.
Life is too short to put yourself through that! Move to a house that is “plug and play,” and leave the big dusty renovations to others.
Question 5: Have you gotten expert opinions?
This might be the diciest one on here! Everyone wants to get good advice, but knowing where to find it, and knowing who is qualified, can be daunting. Especially when you consider how much of your financial life, your family life, and your energy will be put into this kind of project and/or uprooting of your life, finding the right experts to guide you is crucial.
The number one thing to avoid?
Only listening to people who tell you what you want to hear.
There has never been - and there never will be - a renovation project that goes completely smoothly. It is never “easy.” It is never “cheap.” It doesn’t have to be awful and way too expensive, either, but if someone is promising the world, and telling you only positive things, beware - and consider their motivations. Are they trying to steer you in a direction for their own gain?
Ok, so who should you talk to?
Well, I’m biased, but I think you should talk to an experienced architect first. Unlike contractors, architects have a view of the whole project - including zoning, building code, and other regulations, as well as how various contractors work and what they charge.
The key here is *experienced* architect. If you ask your uncle’s buddy’s kid’s friend who’s been in architecture school for 3 semesters, or your contractor’s wife who “watches a lot of HGTV,” the answer will be pretty worthless. An experienced architect can talk about absolutely everything related to the building - from the structure and foundation to the “pretty stuff,” from code/zoning to costs, from how a project should run to fun design ideas.
As you know, I do this as a standalone service [which you can book here], as do many other architects. We’re happy to share our knowledge, and you should be ready to pay - the value-per-minute of those sessions is the highest out of the entire design and construction project.
Starting with the contractor - and I say this as a former contractor - is not a great idea, unless you already have drawings in hand and an understanding of zoning and building code. Good contractors want to see drawings, they want to know you’re serious and they want to know you’ve vetted your project and that it’s real - they don’t want to waste their time with tire kickers!
How do you find an experience architect who’s willing to chat with you?
Ask friends who’ve recently done a project, or know someone who has.
Read local/regional design magazines and press.
Instagram and social media!
Ask contractors you know [or your friends know] for a referral.
How do you know if an architect is a good one?
They should have a portfolio of similar projects to yours.
They should be vetted by having worked with reputable contractors.
They should have demonstrated their expertise in some fashion - social media is the easiest for you to see, unless you’ve got a friend referral.
They should balance telling you tough news with not crushing your dreams!
They should have in-depth understanding of construction and detailing.
Obviously this is a much bigger topic [and one I’ve covered in newsletters before, like this one], but you get the picture. Do whatever you can do to vet the people who are helping you make some of the biggest financial and family decisions you’ll ever make!
Bonus: Vibes
Last but not least? Vibes matter. The vibes of your house, your neighborhood, the folks you’re consulting with - don’t forget to listen to your gut!
Thank you, as always, for your support! Without you, writing these newsletters and bringing you quality content would be a lot harder. If you know someone who would benefit from this newsletter, please share!