Should you renovate or sell your home to get the best deal?

Are you convinced your home no longer meets your needs? Should you look for a new one or try to adapt your existing one so that it suits you once again? There are a few things you should take into consideration before deciding whether to renovate or sell your home.

From a financial standpoint, is it more economical to renovate or sell your home? To determine the answer, you first have to decide exactly what your needs are. After doing that, you’ll be better able to consider the following costs:

• Scenario 1: Renovating. To get a realistic estimate, calculate the cost of renovation work, including labour and materials. You’ll have to meet with the various contractors and ask them to give you cost estimates. It’s important to include a budget line for unforeseen expenditures, since delays and complications often crop-up during renovations. Don’t forget that you’ll also need to redecorate once the work is finished.

• Scenario 2: Selling. Do a thorough estimation of all the various costs associated with the sale of your home. Don’t forget to factor in the move, which can run into the thousands of dollars. Calculate the connection costs for services such as cable television, Internet and phone lines. And don’t forget that in some places, buying a new house also involves a land transfer tax (a.k.a. the welcome tax). Lastly, you need to take into account the difference between the selling price of your house and the buying price of a new property.

The main advantage of renovating is that you won’t need to leave your neighbourhood or find new schools for your children. On the other hand, the hidden costs that can sometimes come up during renovations can blow your budget, and the length and complexity of the work might make you want to opt for selling.

In fact, some types of renovation work can make your home unliveable for a period of time. You might have to move all your belongings around both before and after the renovations, or you could have to squeeze your living arrangements temporarily into the basement. There could also be delays in finishing the work.

Even if selling your home looks as though it would be less costly, you should think about some other factors before making your final decision. Take a good look at the real estate market in your area. Would you be able to sell quickly? Could you sell your home as-is or would you have to do some renovations first?

Keep in mind that the chance of finding a new home that perfectly matches all your needs is unlikely. You may find that wherever you go, you’ll need to do some renovations anyway.

Choosing between renovating and moving requires a bit of serious reflection. Look beyond your budget; time, effort and comfort are important factors to consider as well.