Move or Remodel - The Real Costs

The benefits and disadvantags of moving versus remodeling.

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There comes a time when your current home just doesn't suit your needs anymore. Perhaps you need more space, an extra bathroom, or the appliances are slowly wearing out. Remodeling is an answer to these problems, but sometimes it seems like it can cost as much as a new house, and it's definitely more time consuming. However, moving can create expenses above and beyond the mortgage that must be taken into account, not to mention the stress and hassle of moving.

Rules of Thumb

First and foremost, be sure to stick to a budget. Simply moving to have a nicer home and taking on a mortgage you cannot afford will not bring happiness in the end. Neither will remodeling your house and having bills too large to pay. Set your price range and stick to it.

Moving is definitely the best option if you are looking to relocate to a better location. No amount of remodeling will improve your neighborhood, and in the end it may actually make it harder to sell your house, as no one will want to pay $200,000 for a house where all the neighboring homes are only worth $120,000.

If you decide to remodel, a good rule of thumb to follow is the 15% rule. Do not spend more than 15% of the value of your home on remodeling, as you will not be able to make this money back. For example, a new $20,000 furnace system in a $100,000 house will not repay itself in savings on heating, the house probably needs to be weatherized first, and a nice furnace is not going to influence buyers if you decide to sell.

Talk to Experts

Be sure to talk to realtors, contractors or architects when debating whether to move or remodel. They can give you ideas you hadn't thought of that, for a small fee, will save you lots of time and money in the end.

Loans and Mortgages

Consider the mortgage or loan payment you are willing to take on. How much will the mortgage payment increase if you decide to move to a new home? Keep in mind that on an $180,000 home with a 15-year mortgage the monthly payments would be about $1600. A $40,000 loan for remodeling over 15 years would only be $370/mo. (but add this to your current mortgage to calculate total monthly costs). It may also be possible to tie remodeling loans to your current mortgage to make repayment easier.

"Hidden" Moving Costs

Moving to a new home will create fees beyond a new mortgage. Realtor fees will cut into the profit of selling your old home. There are also real estate transfer taxes, title insurance fees, moving companies or truck rental fees, appraisal fees, and costs of decoration to help your old house sell faster. It has been calculated that the additional fees of moving can reach $70,000.

"Hidden" Remodeling Costs

Beyond an estimate given to you by a contractor, or the cost of the supplies if you're doing the project yourself, there are other costs to consider during a remodel. For big remodeling projects, you have to consider permit fees or the cost of laying a foundation. For smaller projects, don't forget the costs of electricity, plumbing, carpeting, sheet rock, and appliances. These costs can reach thousands of dollars as well.

Use What You Have

If you need more space in your house, like an extra bedroom, don't overlook the large unused space under your house—the basement. It might seem dark and damp, but egress windows will make a big difference. Egress windows are large windows built into the walls of your basement meant to allow an escape in case of fire, but serve a second purpose as well—a way to brighten up your basement.

Egress windows are a necessity to bring your project up to code, so that if you sell your home you can legally count the new room as a bedroom. A contractor can install egress windows for about $2,000 or you can do it yourself in a weekend for about $500. These windows will change the look of the basement and you'll be ready for a new bedroom for 10% of the cost of building a second story addition.

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Quick Remodels

If you're simply tired of your home, or feel it needs to be updated, there are quick, inexpensive projects you can undertake. For example, updating cabinets or repainting a room will spruce it up, often for less than $500. And if you decide that you do want to move, these are improvements that realtors often tell sellers to make anyway.


Repainting any room will freshen up its look quickly and easily. Repainting can easily be done over a weekend for about $300, and you might be surprised at how different the room looks.

Cabinet Refacing

Other quick remodels include refacing your kitchen cabinets. This will brighten up your kitchen and possibly give it a whole new look. Refacing can include repainting, stripping and revarnishing, or simply giving the doors a good scrub. Replacing the cabinet hardware can also change the look of your kitchen very quickly.


Another way to change the look of a kitchen with less work than a full remodel is to replace the countertops. It can be as simple as replacing the outdated countertops to make you fall in love with your kitchen all over again.

Bathroom Tile

New bathroom tiles on the floor, walls, or in the shower will dramatically change the look of your bathroom. Replacing the tile is a project you can do yourself for less than $1,000. If you don't feel up to such a big project, new linoleum is easier to lay and will improve the look of the room, too.

Home-Selling Improvements

There are some remodels that you can do that will add value to your home and may even convince you to stay. Adding a fireplace, which can cost about $1,000 for parts and labor, will add 160% of its value to your home if you decide to sell. Adding a new bathroom can cost $30,000, but will earn back 66% of the investment. This is especially important if your house has fewer bathrooms than other houses in the neighborhood.

The Bottom Line—Move or Remodel?

In the end, it probably comes down to the emotional impact of moving versus remodeling. If you cannot bear to leave a beloved family home, by all means upgrade and remodel as needed. However, even with the extra costs of moving, sometimes it can be the more economic option. Bear in mind that a whole new second story addition, complete with a full bathroom will cost about $100,000, which is far more than the costs of simply moving to a larger house.

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