There comes a time when every home owner asks themselves this question – “Should I renovate my home or buy a new one?” This is a major decision. Either way it means spending a whole pile of cash and making major changes to your lifestyle. It could even be the biggest decision of your life. There’s no right answer for everybody. Instead, there are pros and cons of each option. Let’s take a minute to look at these.
The Pros Of Renovating
The biggest reason home owners renovate is to increase the value of their home. Even small, simple changes such as painting or installing new lights can make a huge price difference. It doesn’t have to cost a great deal of money but it can get you great returns when it’s time to sell your home.
Renovating can also make you feel like you’re living in a new home. More drastic renovations like adding rooms or changing the flooring can make you feel like you’ve moved when you didn’t go anywhere at all. Renovating is also obviously much cheaper than buying, even if you make major changes.
The Cons Of Renovating
Although it’s cheaper than buying, it can still get you into a world of financial trouble. Most people who renovate go way over their budget and this can cause lots of problems. It’s really hard to budget correctly for your renovations because there are always little unexpected surprises.
Sometimes, renovations can actually hurt your ability to sell. For example, adding too many rooms can turn your home into an unsellable monster. It narrows the market of home buyers who might purchase your house. If your renovations make drastic changes that make your home the odd man out in your neighborhood, this will also hurt your chances of selling it.
The Pros Of Buying
When you buy a new house, you’re making a major investment and, in any kind of investment, it’s all about equity. A new house gets you more equity than your old one. Paying your mortgage each month is like putting money into an extremely lucrative savings plan. You can often get bigger returns on your home investment by buying a new home because house prices tend to rise in Canada.
The Cons Of Buying
First, the obvious downside – it is extremely expensive to buy. Your home is the biggest purchase of your life. Not only do you have the down payment to think of, but you also all of the little expenses that pop up along the way. There are always things you forgot to include in your budget such as buying new furniture.
Although you can get bigger returns on your investment, buying is a much bigger undertaking than renovating. Even the most complex renovating jobs are nothing compared to the time, effort and expense it takes to buy a new home.
The real question you should ask yourself is – “How much do I want to pay and how much am I willing to do?” If you’re not sure you’re up for the massive expense and undertaking of buying, try renovating and see what you can do to your home’s value.