List what is actually wrong
Write down everything about your house that bothers you. Then mark each item as fixable by construction or not fixable. Too few bedrooms, a dated kitchen, no main-floor bath, an unfinished basement and no outdoor living are all fixable. The school district, the commute, a busy road, the size of the lot and the neighbors are not. If most of your list is in the second group, remodeling will not make you happy.
Add up the true cost of moving
Selling costs, including agent commissions, closing costs, repairs and concessions, commonly total seven to ten percent of the sale price. Add moving expenses, overlap costs, and the expenses of making the new house yours, since few people move and change nothing. Then compare mortgage terms. If your current loan has a much lower rate than you would get today, the monthly cost of a larger new mortgage can far exceed the cost of financing a renovation.
Price the renovation honestly
Obtain a realistic budget range from a contractor before deciding, and include everything: design, permits, contingency and temporary living arrangements if needed. Compare it with the moving costs above. Do not expect every renovation dollar to return as resale value. Some will, some will not, and part of the return is simply enjoying your home.
Check for over-improvement
Look at what the best houses in your neighborhood sell for. If your home's value plus the renovation cost lands well above that ceiling and you might sell within five years, scale the project back. If you plan to stay fifteen years, the ceiling matters much less.
Consider the disruption
A large renovation means months of decisions, dust and strangers in your house. Moving means weeks of intense stress and then it is finished. Households handle these differently. Be honest about which you would manage better.
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