COVID-19 is causing different challenges for everyone. Things that were once easy have become more complicated and time consuming, especially when it pertains to financial decisions. Deciding whether to renovate your home or move into a new one in the midst of this global pandemic for one, comes with added stressors. Try some of these helpful tips to take the financial anxiety out of moving or remodeling and make this milestone a little easier in the midst of these uncertain times.
Consider the area:
Location is more than just your home – consider the school district, surrounding community, neighborhood and amount of land. Most will agree location is everything, and If you love the location of your current home, that is a great enough reason to stay put. However, if you’re still adamant about moving for other reasons, these location factors could attract potential buyers as well… let’s review your options.
Renovating your home may require more than just a fresh coat of paint, and instead could mean much needed addition. If you plan to expand your family or if you just want more space, first determine whether your current property can accommodate the addition or renovation. The growth of your family may require more bedrooms or a larger common room, but if your home and property size are too small to make an addition, this may be a sign to move.
Another consideration is the community you live in. Whether it’s a cozy village, offers great community activities, or you just love your neighborhood, these are the things you may miss if you move to another area. The same sentiment goes for the school district. If it’s highly rated and you have kids in school, it might be worth staying in the area. If you decide moving is the best option for you and your growing family, look for a home in the area that checks off all of the boxes, while offering the space you need!
Keep all of these considerations in mind when looking for a buyer as well. If you are an empty nester contemplating moving, these details may be important for a young family looking to move into a top school district. Have your home appraised and research recent comparable homes sold in your area to decide if yours could be an easy sell in the current market.
Review your finances:
Buying a home is always an investment. If that’s the side you’re leaning toward, you have to consider if you’re financially ready to go through the process. Right now, mortgage rates are at an all-time low due to COVID-19, and that may be enough to sway you in the direction of buying a new home. However, you may need to invest in minor upgrades to your current home before listing it to sell, as well as pay an agent and movers. Set extra money aside for these improvements when budgeting for the big move. You may also want to consider keeping your current home to rent on Airbnb for added income, while buying a second home to live in.
If you’re leaning toward renovating your current home and staying long-term, you have a multitude of choices to consider depending on your financial situation. Home equity loans are an option for homeowners with a decent amount of equity built up in their purchase. Usually, if you’ve owned your home for five years or more, you can take out this loan to use for whatever you’d like. Most homeowners choose to use a home equity loan or line of credit for home upgrades but you can also consider liquidating investments, using a personal loan, margin loan, or pledged asset line of credit. Be sure to pay attention to interest rates, as they may be higher for these types of loans considering the economic times.
Be aware of timing:
Due to COVID-19, selling your home or starting renovations will take longer than usual. We are living in unprecedented times, where those who can help you sell or update your home are finding unique and optimal ways to get their jobs done, while still experiencing some barriers that may slow their services down. Be patient,and use this time to connect with your renovators or realtors to find or build your perfect home.
Right now, it’s smartest to work with a realtor if you’ve decided to sell your home. Viewings have to be done virtually for the time being and you will strongly benefit from using a realtor to advertise your home online. Be aware that selling your home may take longer than in years past because many people feel less secure in their finances. Additionally, it’s hard for a buyer to make this decision without seeing their potential new home in person.
On the other hand, finding a contractor won’t be easy either. All over the country, home renovation projects are being delayed or cancelled due to stay at home orders. However, some states have recently allowed construction workers back on the job, deeming them essential. If your desired contractor is able to work and follows all CDC regulations, you can likely get your home renovation started now!
All in all, there are positive and negatives to both renovating and selling during this time. Hopefully we have given you some things to consider when trying to decide between these two options. Keep in mind that your situation may be different from your friend or neighbor, and you have to do what is best for your family right now. Involving your financial advisor in this discussion can help provide both the financial insight and perspective of your long-term goals, along with an objective viewpoint on a decision that is often quite emotional. If you’re considering this major change and want to discuss it related to your specific situation, please don’t hesitate to reach out.