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5 Crucial Questions to Ask Before You Flip Your First House

October 30, 2019

AleksandarNakic/iStock

Thanks to the seemingly endless glut of home improvement TV shows like “Flip or Flop,” “Masters of Flip,” and “Rehab Addict,” it seems like flipping houses has become America’s favorite pastime.

But for the inexperienced, house flipping can be a dangerous and costly game. Make one wrong move, and that “great investment” can turn into a monumental mistake.

Don’t want your first flip to be a flop? Here are five questions you might never think to ask yourself, but totally should, before you begin flipping houses.

1. Do I have a great house flipping team?

Buying and flipping a house isn’t a one-person job; it’s a team sport, and you need to surround yourself with the right players. This starts with having a savvy real estate agent who can help you not only find a great investment opportunity but also negotiate a great deal on the property. Buy low, and things are already looking up!

You also need home improvement professionals who can guide you through the remodeling process and help you set a budget, determine what renovations to make (some yield a better return on investment than others), and solve any issues that crop up during construction.

Typically, you want to hire a general contractor, a person who’s responsible for providing all of the laborers, building materials, and equipment necessary for the entire project.

2. How long will it take to flip this house?

Ideally, you want to buy a house that can be renovated within four to six weeks, says Bobby Curtis, a real estate broker at Living Room Realty in Portland, OR.

A short turnaround time will help you keep costs like interest and taxes to a minimum.

On average, homes take about 180 days to flip, according to ATTOM Data Solutions, curator of a nationwide property database. But flipping a house can take a lot longer. After all, there’s no telling what you’ll find when you start tearing down walls.

Mold could be lurking behind drywall in a basement, or there could be electrical issues beneath the surface, warns J.B. Sassano, president of Mr. Handyman, a national home improvement company based in Ann Arbor, MI.

Also, depending on the housing market, it may take you a while to find a buyer once the home is fixed up.

The moral of the story: Patience is more than just a virtue for house flippers—it’s a requirement.

3. Am I putting too much at risk?

Although there are a number of loan options for house flipping, many first-time house flippers stretch themselves too thin when it comes to how much of their money they invest in a project. Some even put their entire retirement savings or child’s college fund on the line. Not a great idea!

It’s important to truly assess your risk tolerance. Depending on where you are financially, you may or may not be a good candidate for flipping houses right now.

4. Can I think like an investor instead of a homeowner?

When flipping houses, you have to keep future home buyers in mind. While it may be tempting, the last thing you want to do is make home improvements and design decisions that reflect your personal tastes instead of what most home buyers want.

Be prepared to choose home features and housing materials that are classic and offer wide appeal. If you can’t commit to doing that, flipping houses isn’t the right endeavor for you.

5. Do I understand my loan options?

Unless you have a ton of cash readily available, you’ll need to borrow money to buy and renovate a distressed property. But obtaining a loan for a house flip isn’t like getting a conventional loan for a home you intend to actually live in.

Most house flippers use a “fix-and-flip loan” that’s specifically designed for purchasing and remodeling homes. There are five types of fix-and-flip loans, and each comes with its own set of qualification requirements and pros and cons.

Hard-money loan: Sometimes called “rehab loans,” these are short-term loans intended for real estate investments. These loans are usually much shorter than traditional mortgages. Six months to one year is most common, but hard-money loans can go up to five years. Moreover, interest rates are considerably higher, typically ranging from 12% to 21%, and most hard-money lenders also charge 3 to 6 points upfront, where 1 point equals 1% of the loan.

There’s also a limit on how much you can borrow. Typically, hard-money loan lenders allow you to borrow about 60% to 75% of the property value you intend to purchase. So, if you’re looking at a $200,000 property, for example, the most you’ll probably be allowed to borrow would be $150,000, meaning you’d have to pay $50,000 upfront.

Cash-out refinance: If the value of your primary residence has increased, one financing option for your flip is a cash-out refinance. This lets you tap the equity in your home by refinancing your mortgage for more than you currently owe and taking the difference in cash. Your new loan will be the amount you still owe on your mortgage, plus the cash you wanted to take out.

So, say you had a $300,000 loan, on which you still owed $200,000. That would mean you had $100,000 in equity in your house. You could cash out $25,000 of that equity, and get a new mortgage for $225,000, to replace your existing $200,000 loan—and then put that $25,000 toward your house flip.

The drawbacks? You’ll have to pay closing costs—which average about 3% to 6% of the total loan—and if you’re refinancing to a higher mortgage rate, you could wind up paying more money in interest on your loan over the long run.

Home equity loan or line of credit: Both a home equity loan or home equity line of credit are financing options that let you borrow money using the equity in your home as collateral.

The big difference: a home equity loan provides you with the cash upfront, and you pay monthly installments over the length of the loan (like you do on your first mortgage). With a HELOC, you access the money in small chunks over the life of the loan.

Investment line of credit: Also called an “acquisition line of credit,” an investment line of credit is similar to an HELOC—except it’s issued solely for buying investment properties.

This short-term financing option—with loans generally lasting from about 18 to 24 months—lets you borrow cash as needed, up to a predetermined loan limit. These loans are best suited for people who have experience flipping houses, since borrowers are underwritten and approved based on their demonstrated record of owning or flipping investment properties, and their financial wherewithal.

Crowdfunding: When using crowdfunding, or “peer-to-peer lending,” the funds are raised through the contributions of a large number of people, usually through the internet.

For instance, RealtyShares, a San Francisco–based company that finances investment properties in 35 states, gives house flippers access to more than 38,000 high net worth individuals who invest in a specific transaction for as little as $5,000. RealtyShares funds up to 70% of the estimated after-repair value of a property in as little as 10 days. Interest rates vary from 8% to 11%, with the average loan term on luxury flips being 12 months.

The post 5 Crucial Questions to Ask Before You Flip Your First House appeared first on Real Estate News & Insights | realtor.com®.

5 Crucial Questions to Ask Before You Buy a Fixer-Upper

September 18, 2019

iStock; realtor.com

Thinking about buying a fixer-upper? Join the club. Blame it on the popularity of renovation reality TV or just the fact that people are searching for deals, but many home buyers are willing to purchase a property in need of major repairs. One survey by Clever Real Estate found that 67% of millennial home shoppers in the United States said they would put in an offer on a home with serious flaws that need to be fixed.

Purchasing a home that needs serious remodeling, though, isn’t a decision you should make lightly. Here are five questions to ask yourself before buying a fixer-upper.

1. What’s my motivation?

Reviving a rundown home is always a challenge, no matter how many houses you’ve flipped or episodes of “Fixer Upper” you’ve seen—and that’s why it’s important to assess your motivations before you dive in, says Joshua Jarvis, founder of Jarvis Team Realty in Duluth, GA.

Simply enamored by what you’ve seen on HGTV? Newsflash: “Reality TV is not reality,” says Jarvis. “I hate to shatter people’s dreams, but there’s a lot more work involved than people think.”

Flipping an outdated house in order to make a profit, though, is a sound reason to buy a fixer-upper, Jarvis says. After all, home flips in 2018 returned an average gross profit of $65,000, according to ATTOM Data Solutions.

Purchasing a fixer-upper can also be a good idea if you’re looking to make a home your own without building one from scratch, or if you’re simply looking for a great deal. Indeed, people shopping for a fixer-upper can expect to spend 20% to 25% less than what they’d have to shell out for comparable homes that are move-in ready, says Dan Bawden of the National Association of Homebuilders. (Homes with serious issues—such as cracks in the foundation or a major mold infestation—can command even deeper discounts, Bawden says.)

Fixer-uppers are also good options for DIY buffs—your sweat equity will buy you bragging rights. What’s sweeter than being complimented on your kitchen and being able to say, “Thanks, I did it myself”?

2. Where am I going to live during the renovations?

Unless you’re planning to live in your new home while the renovations are underway, you’re going to need a place to stay until the house is ready. This can be a financial challenge, Bawden notes, since you have to factor in the time you’ll be paying the mortgage and bills without being able to live in the home. Read: Six months of paying rent on top of your house payment can quickly eat into what you saved on your “great deal.”

3. What’s my remodeling budget?

The best fixer-uppers are ones that mostly need cosmetic updates—things like kitchen and bathroom renovations, new floors, siding repair, or wallpaper removal—since major flaws can quickly eat up your remodeling budget. But, regardless of how much (or how little) work you’re going to put in, you need to have enough money to pay for the renovations.

Need help setting a budget? Have several contractors give you in-person estimates. That way you’ll have a rough but accurate idea of how much it’s all going to cost you. The caveat: You may have to pay the professional a few hundred dollars to walk through a potential home and estimate the renovation costs, but it’s worth it.

4. How am I going to pay for everything?

Now that you know how much the renovations are going to cost, you have to figure out how you’re going to pay for everything. Unless you’re sitting on a mountain of cold, hard cash, you’ll need to obtain a home loan that allows you to spend a portion of money on home improvements. The good news: A home that requires major renovations can qualify for a special type of financing called a home improvement loan. There are two main types of home improvement loans.

The first is a FHA 203(k). This is a loan from the Federal Housing Administration that lets you put as little as 3.5% down. There are a couple of restrictions, though. The original foundation must remain, says Suzanne Caldeira, vice president at mortgage lending company Shamrock Financial Corp. Also, the upgrades you make cannot be “luxury” items, like adding a pool or fire pit. Third, the work must be completed within six months.

To qualify for a 203(k) loan, homeowners have to provide a bid from an approved contractor to make the upgrades they want with their loan paperwork. An appraiser reviews the home and the submitted bid, and appraises the estimated value of the home post-renovation. Once the loan is approved, the money for the renovation is put into escrow. After the work is completed—the deadline is six months—an inspector visits to determine that it’s been done correctly, and then the money is released to the contractor. In the same way as with traditional FHA loans, you can pay the money back over 15 or 30 years.

The second type of home improvement loan is a Fannie Mae HomeStyle loan. It’s similar to a 203(k) loan, but it requires a down payment of at least 5%. Another difference: There’s no limit to the kinds of renovations you can do, as long as everything is permanently affixed to the home and adds value.

Like a 203(k) loan borrower, you will need to hire an approved contractor and submit a bid for the project with your loan paperwork. You then have an appraiser determine what your home will be worth after the renovations. Once you’ve got that number, you can borrow up to 50% of that appraised value to work on the renovation. As with a 203(k) loan, the money for the renovation is held in escrow until the work is completed and inspected and is then released to the contractor. However, with the HomeStyle loan, you get 12 months to complete the renovation, instead of six. You then pay it back over a period of 15 to 30 years at either a fixed or adjustable rate.

5. Am I prepared to manage this project?

From finding the right house and negotiating a deal, to hiring contractors and securing permits, there will without a doubt be plenty of moving parts for you to oversee during this whole process. That will mean you need to ask yourself whether you have the time and the patience to manage everything.

While hiring a general contractor to oversee the renovations can help lighten the load, reviving a fixer-upper is still a huge commitment, so make sure you know what’s required before you dive in.

The post 5 Crucial Questions to Ask Before You Buy a Fixer-Upper appeared first on Real Estate News & Insights | realtor.com®.

7 Important Home Repairs to Do Right After Moving Out

August 28, 2019

Kativ/iStock

Congratulations: You’re moving out, and on to your next home! Now all you have to do is pack up your things and skedaddle, right?

Not so fast. If you’re still trying to sell your current home, you’ll want to make sure it looks its best, which means you might have to make a few repairs. And there’s no better time to do this than after you’ve removed all your boxes and furnishings, since this means you’ve got plenty of space to get the job done right (and with minimal mess).

Granted, you might have already made some upgrades during the early stages of sales prep … but moving out means you could uncover a whole lot more. And trust us, buyers will notice!

Of course, if you’ve already sold your home, you’re off the hook … but if not, it will behoove you to do these seven upgrades after moving out. Don’t worry, they’re fairly easy, and they’ll make a big difference helping you find a buyer who’ll pay top dollar.

1. Patch holes in walls

Seeing walls with holes—even small holes left by nails—is an immediate turnoff to home buyers, says Sarah Fishburne, director of trend and design at The Home Depot. But you don’t have to repaint your entire house to have your home looking fresh again. A little spackling, followed by spot painting—a cinch if you’ve kept some original paint—will do the trick. (If you don’t have any leftover paint, peel a dollar-size piece from the wall and bring it to the paint store so they can match the color for you.)

If you have only a few holes and scratches, you can fill them with spackling compound, which is sold in small quantifrecities. For a greater number of gashes or holes, use joint compound, which is sold in quarts or 5-gallon buckets.

2. Add a fresh coat of paint to rooms that are outdated or painted in loud colors

Love that plum paint color you chose for your master bedroom? Home buyers might not! The good news is, painting a room is an easy, low-cost project you can do yourself. Selecting the right hue, though, is crucial.

“Neutral colors are generally the safest choice, as they blend with many different decor styles,” says Hunter Macfarlane, Lowe’s project expert. “Gray is a popular color to paint a room before selling, as it gives the walls depth while still tying furniture and other decor items together.”

Moreover, “a fresh coat of paint never hurt resale value,” Fishburne says.

3. Replace old outlet wall plates

This is another quick and budget-friendly way to make a space feel cleaner and updated, Macfarlane says. Proceed with caution, however: Old wall plates can be a fire hazard if they’re cracked or damaged in any way. If you suspect there’s an issue, hire an electrician to replace the wall plates for you.

4. Clean carpeting

Dirty and dingy carpets are huge eyesores, which is why David Pekel, chief executive officer at the National Association of the Remodeling Industry, recommends that homeowners give their house’s carpeting a good cleaning after moving out. You can amp up your vacuum with rug-cleaning products such as powders, foam sprays, and liquid shampoos available at grocery and hardware stores. For stained areas, use a bristled brush to work the cleaning solution into the carpet before allowing it to dry and then vacuuming up.

To remove embedded dirt, you may need to use a powerful industrial-style carpet-cleaning machine, like a Rug Doctor, which sprays hot water with a detergent over the carpet and extracts it with a high-powered vacuum. Industrial carpet cleaners have more washing and sucking power than most consumer carpet cleaners, but they’re expensive to buy—about $400 to $700—so it’s more economical to rent one from a hardware store for about $25 to $30 per day.

5. Clean hardwood floors

Many home buyers swoon over hardwood floors. So if you have them, make sure they’re glistening after you move out.

“Wood is probably the easiest floor covering to keep clean, but you have to use the right cleaning products,” says Brett Miller, vice president of education and certification for the National Wood Flooring Association in St. Louis.

Most wood floor installers or manufacturers recommend cleaners that contain isopropyl alcohol, which dries quickly, and are available at home supply stores. To make your own solution, simply add a capful of white vinegar to a gallon of water, which will help dissolve grease and grime on the floor but won’t strip the finish. To remove shoe scuffs, rub marks with a tennis ball, which cleans without scratching the finish.

Under no circumstances should you use a steam mop, Miller warns.

“Steam is horrible for wood floors. It opens the pores in woods and damages the finish, causing irreversible damage to any wood floor,” he says. Here’s more on how to clean hardwood floors.

6. Replace or refresh old hardware

Swapping out old cabinet and door hardware is a simple, low-cost project you can tackle in a day that will make your home more visually appealing. All you need is a screwdriver and a free afternoon. Want to save some money? Keep your existing hardware and give it a makeover with spray paint—a few light coats can breathe new life and personality into rusty old knobs and pulls.

7. Improve the look and functionality of your master bathroom

A full bathroom remodel is expensive; on average, it costs $10,344, according to HomeAdvisor. Just a few changes to your master bathroom, though, can make it one of the most stylish rooms in your house.

Simple touch-ups, like regrouting and recaulking bathroom tile, will make the room look newer. In addition, swapping out inefficient toilets, faucets, and shower heads for products that aid in water conservation can add real appeal to prospective home buyers who are looking to lower their water footprint (and lower their water bill!). A low-flow toilet, for example, uses 20% less water than a standard toilet, and water-saving shower heads can help families save almost 3,000 gallons of water a year.

The post 7 Important Home Repairs to Do Right After Moving Out appeared first on Real Estate News & Insights | realtor.com®.

7 Painful Lessons I Learned While Tearing Down and Rebuilding My House

November 3, 2018

When my husband and I bought our first home 11 years ago, we knew it needed some work. Yet after a decade of mulling over possible remodels, last year we took a much more drastic approach: We tore down the house and built a new one in its place.

Most people thought we were crazy, but we knew it was the best decision for us. We live in Little Rock, AR, in one of the city’s few walkable neighborhoods, with oak tree–lined streets and shops and restaurants just a few blocks away. We loved our neighborhood, and we wanted to stay.

But the house, built in the 1940s, just wasn’t right for us. The walls were riddled with knob-and-tube wiring, and there were a slew of plumbing issues. It also was just too small for our family, particularly since I work from home.

Once we added up all the small jobs we wanted to do, we realized that tearing the house down and starting from scratch would cost about the same price as a renovation.

The whole process took a stressful and exhausting eight months. But now we have a beautiful, brand-new home.

It was all worth it, but if I had to do it again, I’d definitely do a few things differently. So if you’re thinking of going this route, here’s my advice for surviving it all.

tearing down a home
Our ’40s-era home needed so many repairs and updates, we decided to tear it down.

Erica Sweeney

1. Figure out exactly what you want before you start

At the outset, we’d met with our building contractor about a bathroom remodel and possible extension—because that’s all we thought we needed. But because the bathroom shared a wall with the kitchen and we’d have to redo all the plumbing and electrical anyway, it “made sense” to redo the kitchen as well. While we were at it, we figured we could add a master suite. So, we met with an architect and had plans drawn up.

That’s when we talked to our builder again and realized that demolishing the old house and starting over wasn’t that much more expensive. So we met with the architect again, and got another set of plans.

I wish someone had encouraged us to step back and think carefully about what we really wanted upfront, taking into account current and future needs, and budget. That way, we could have done just one building plan rather than two.

House Frame
Tearing down and rebuilding meant we could build the home of our dreams.

Erica Sweeney

2. Shop for everything upfront, right down to the door hinges

Building a house comes with countless decisions—everything from door hinges to flooring, tiles, paint color, windows, and more. Make as many decisions as you can early in the process, and that will give you a better idea of how much the project will cost.

To prioritize, figure out which rooms or items are most important to you. For us, that was the kitchen. My husband and I both like to cook, so we spent more there, choosing a pricey farmhouse sink and quartz countertops.

The early stages of our kitchen construction

Erica Sweeney

We splurged in the kitchen with a farmhouse sink and quartz countertops.

Erica Sweeney

3. Never make assumptions

Don’t be afraid to ask questions of your building contractor and any subcontractors, no matter how obvious the answer might seem. After all, your money and future home are at stake.

Take our back porch, for example. On the plans, it looked like it was at ground level, and we assumed that it was. It turned out to be more than 5 feet off the ground, meaning we had to get a rail, which wasn’t in the initial budget.

4. Neighbors may cause drama

Before we tore down our house, we informed the neighbors on either side of us and apologized in advance for the inconvenience. They were incredibly patient and wished us well. However, the neighbors a few doors down, whom we didn’t even know, would let their daughter, who was maybe 6 or 7, play on our construction site. One day, I pulled up to find the girl bouncing around the site wearing a child-size hard hat!

I’m not sure there’s a solution for neighbors with a foggy sense of boundaries, but if you’re building, be sure that the site is as secure as can be. We fenced off our construction site and posted “No Trespassing” signs. It’s also a good idea to inform the whole block about the project, with a reminder about the dangers of a construction site.

“No Trespassing” signs are a must to keep out nosy neighbors.

Erica Sweeney

5. Check everything

This is something I can’t emphasize enough: Check everything—each invoice, list of materials, quotes, and anything else. Chances are, something will be wrong, and problems found early are much easier to fix. In our build, the quote for doorknobs included the wrong count, and the window quote listed windows with the wrong grid pattern. A quick phone call remedied these issues before anything was ordered, delivered, or installed.

We opted for stucco on the exterior.

Erica Sweeney

6. Utility companies will be a headache

Dealing with the utility companies was one of the biggest, most unexpected headaches of the teardown and rebuild. They gave us incorrect information and didn’t keep their scheduled appointments to disconnect utilities and then reconnect them, which delayed the demo and other parts of the construction. I called them so many times that I had the numbers and automatic phone system menus memorized.

My advice: Start contacting them early in the process, verify what they tell you, and follow up a lot.

7. Work with your partner, as best you can

The stress of building a house can’t be emphasized enough. All the decision-making, meetings with different subcontractors, delays, and other issues can be overwhelming.

Luckily, my husband and I agreed on everything designwise. We didn’t do as well with coordinating who was going to do what. Since I work from home, I attended most of the meetings. But that meant having to relay information back and forth and then having to delay actual decisions until I could talk to him.

Looking back, I wish we’d created a plan outlining the specifics of who would do what and how decisions would be finalized.

———

About eight months after the teardown, we moved back to our neighborhood and into our brand-new home. It has more than double the square footage, with a lot more windows, a garage, and a nice office for me. While it was a long road, we love having a home we’ve chosen—right down to the doorknobs.

It took about eight months to tear down our old home and build anew.

Erica Sweeney

The post 7 Painful Lessons I Learned While Tearing Down and Rebuilding My House appeared first on Real Estate News & Insights | realtor.com®.

Move or Improve? These Scenarios Will Help You Decide How to Spend Your Dough

August 3, 2018

move or improve?

Lex20/iStock; LightFieldStudios/iStock; realtor.com

There comes a time when every homeowner will spread their arms, look around, and say, “This house feels too small.” Perhaps your kids have outgrown their bunk beds, or your partner’s startup blew up, and now every inch of your bungalow is occupied.

One way or another, you need more room. But do you break ground on your current home or break your budget on a new house? The decision to move or improve can be complex and emotional. On one hand, you love your neighborhood and the memories you’ve made. But on the other hand, you love space. So how do you choose?

The answer depends on your neighborhood, your budget, the housing market, and (sorry) your mom. Here’s how to tell whether you should start over in a new place—or transform your existing property.

First, ask yourself the tough questions

You might be salivating over the houses for sale or dreaming of your double-size, custom-built master bedroom—but don’t make a snap decision based on a fantasy.

Instead, start by making a classic list of pros and cons. What is it about buying a new home that tickles your fancy? Or does the process stress you out? Are you pumped for renovation—or would you rather ditch the dust?

“Essentially, these are two different paths to the same destination: a home to love,” says Michael Hausam, a Realtor® in Irvine, CA.

Hausam suggests that the mere act of listing your ideas might make the decision. Maybe your “move” column vastly outweighs your “stay” list—but you want that new bedroom, dammit! Then you have your answer.

And if you’re struggling still? We’ve done the heavy lifting for you. Take a peek at the following scenarios to determine whether you should move or improve.

Move: If your city gives your plans the thumbs-down

You’ve drawn up elaborate plans for popping the top of your two-bed bungalow. But your city might not be on board. Before breaking ground, find out if your proposed idea meets zoning requirements.

“The local government is where you’ll need to go to find out if you can even expand your current living space,” says Realtor Kaylin Richerson of Prime Real Estate in Valparaiso, IN.

To figure out if your new expansion will pass muster, you’ll need to gather a pile of documents. Plan to get a property survey and detailed drawings just for the permit alone. And if your city says no—well, it’s time to start house hunting.

Improve: If your home is unique

Your first house hunt was hard enough. Now you want to do it again? Oh, but where will you find the perfect home? You need only an indoor-outdoor shower, built-in library (of real mahogany), and double-vanity bathroom for the kids.

If your current home already comes with the special features you require, add on instead of buying new.

“The more unique the needs and requirements, the more difficult it may be to find another home with those features,” Hausam says.

Move: If your current home is in a seller’s market

The best part of being in a seller’s market is taking advantage of the seller’s market. If your home has dramatically increased in value during your tenure, it could be “more beneficial to sell your home and buy a bigger and better home than to expand,” Richerson says.

But make sure to check with a local real estate agent before finalizing your decision.

“In certain areas and price ranges, some houses are sitting on the market a bit longer,” she says. If that’s you, a renovation may be in order.

Improve: If you love your location

Time for a caveat: Just because your home is in a seller’s market doesn’t mean you should always sell. If you love your location and home prices are skyrocketing, remodeling may be the only way to stay put in your neighborhood.

After all, if your home increased in price, every other house in the area did as well. You might be profiting $100,000 by selling your place—but good-stinking-luck finding anything else in your price range, especially if you want to upgrade. Adding a wing might be the cheapest way to get space without sacrificing your A-plus location.

Move: If renovating will be an ordeal 

Say you’re snug in a three-bedroom ranch, but you’d like at least five bedrooms and a new playroom. That’s a lot of work. Figure out how big the gap is between what you have and what you want. If it’s enormous, undergoing a massive renovation might not be worth it.

Start by considering remodeling costs, the length of time your home will be under construction, and whether you plan to live in the home during construction, Hausam recommends.

“A significant remodel project is an extremely big deal—far more involved than would be packing up your things and moving them,” he says.

Improve: If your parents want a say

“But my folks don’t get a say in my house!” you might be thinking.

Except when you need additional space to accommodate aging parents. You’ll likely be looking for an in-law unit—which can be tricky to find on the market, much less one that said mother-in-law actually likes.

“We deal with many people struggling with this decision,” says Christina Souretis, a Realtor in Duxbury, MA. “The ones that decided to expand usually have parents that need to move in with them, so there are more people involved in the home-buying process. Not everyone can decide on a house.”

Expanding makes it much easier to take your parents’ taste into account by designing an add-on specifically for them.

Move: If you’d be building the biggest house in the neighborhood

Take a look around. Have a lot of your neighbors expanded? Or are they mostly chilling in the original square footage?

“Before expanding, families should make sure they’re not adding on in a neighborhood with smaller homes,” Souretis says.

Why? When it comes time to sell, unloading the priciest home on the block typically will be a challenge. If you expand and decide to sell in the future, you might be restricting your buyer pool. So before you make any decisions, think about the long-term consequences—not just what makes you happy right now.

The post Move or Improve? These Scenarios Will Help You Decide How to Spend Your Dough appeared first on Real Estate News & Insights | realtor.com®.