The decision to sell or remodel requires several considerations. First, ask yourself if you are happy in your current home with the exception of the space constraints.

If you answered “no,” then you should definitely consider a larger home. If you’re unhappy with your home now, it’s doubtful the remodeling will significantly improve your outlook.

If, however, you’d like to stay in your current home, you’ll need to weigh a few other considerations. There are three factors to consider when deciding whether to remodel or expand your home.

First, how long do you plan to live in your home? The longer you plan on living there, the more time you have to recoup your remodel investment.

Second, what’s the growth rate of home prices in your area? The faster homes appreciate in your area, the faster you will recoup your investment.

Third, and most importantly, know how much you can spend on your remodel without exceeding the market value of your home.

A good REALTOR can access reliable statistics you’ll need to address these factors. Here’s a general formula that will help in the process:

1. Ask your REALTOR for a current Comparable Market Analysis (“CMA”) of your home;
    
2. Subtract how much you paid for your home when you purchased it; 
   
   
3. The “net” of these two values will “approximate” how much you should budget for your remodel without going “upside-down” on your home’s value.

Of course, the longer you live in your home and/or the faster it appreciates, the more you can allocate for a remodel. It also is a good idea to look at the cost of new, larger homes. You can determine what your monthly payment will be and then how it compares in price to your old mortgage plus the remodeling loan.

All the best,

Rhondall K. Rapoza, Realtor
Island Land Company Inc.