Renovate or Move? : What to Do When Your House Won't Do

January 21, 2007

The closets were tiny and the kitchen was outdated in Bill and Nichole Van Zilen's Bergenfield Tudor.

"Everything was ancient," said Bill Van Zilen.

The Van Zilens considered moving, but they liked the short commute to their tech jobs in New York, as well as the vintage charm of their 1920 house. So they took out a home equity loan, plunged into more than $100,000 worth of improvements and created the house they wanted out of the house they had.

"Going through a renovation is tough, but I'm very happy with the results," Van Zilen said.

Renovate or move? The choice the Van Zilens faced is one that most homeowners confront eventually, whether they need more space for a growing family, or just can't stand another minute looking at the 1960s Formica in the kitchen.

The answer is different for everyone, of course. For every homeowner who braves a renovation, there is one who decides the only way to a dream house is with a moving van.

Chris and Audra Eliopoulos, for example, loved their three- bedroom Park Ridge contemporary, but needed more space for their 7- year-old twins, visiting relatives and Chris' studio (he's a cartoonist). They thought about an addition, but balked at the high cost and decided it would take up too much of their property.

So they moved last year to a River Vale bi-level with four bedrooms and a two-car garage. The previous owner, a builder, had expanded the house.

"It had everything we wanted, for about the same amount as we would have spent if we had stayed in the old house and added on," Chris Eliopoulos said.

And they didn't have to live through a construction job.

Tom Beritelli, owner of Re/Max in Wyckoff and president of the RealSource Association of Realtors, said there are a couple of steps that can help homeowners untangle the renovate-or-move question.

Start by determining how much your house is worth. Figure out how much you plan to spend on the addition or renovation and add 10 percent for the inevitable cost overruns, he advised.

Then take that total, and see what houses are available in that price range. Maybe you can get what you want, or even more for example, a better neighborhood in addition to the extra bedroom you need. Randy Douglass of Douglass ERA in Montvale said many of his clients often find that moving will let them get what they want without the hassle of renovations.

On the other hand, maybe you'll hate everything you see in your price range. In that case, you might be better off hiring a contractor to remodel your house.

But be careful, Beritelli warns: You don't want to over-improve your house and price it out of your neighborhood's range. If you live on a block of $500,000 houses, and add $300,000 in improvements to your house, you probably won't be able to get $800,000 when it's time to sell.

In fact, no matter what you do, you're very unlikely to get all your money back if you renovate. Remodeling magazine's latest survey on what kind of return homeowners can get on improvements finds that your new kitchen is like a new car: it begins to depreciate the second as you start using it.

According to Remodeling, in New Jersey, Pennsylvania and New York, new windows and siding offer the best returns at resale, repaying about 90 percent of what you spend. New kitchens and baths return about 80 percent. Adding a master suite or sunroom? You'll get back less than 70 percent of what you spend.

Of course, the decision is not only economic; it's emotional, too.

For one thing, how do you feel about your location? Do you like your neighbors, or find them loud and obnoxious? Do you want more or less property, or are you happy with what you have? Do your kids love their schools, or do you think you could find a better system elsewhere?

"Most people [who remodel] like the area they live in, they like the school system and they like their neighbors," said Ralph Zielinski of R&R Remodelers Inc. in Clifton.

In North Jersey, where many people travel long distances to work, the commute should also be part of the equation. Will moving make your commute better or worse?

"I might be able to move 30 miles away and get half an acre, but if I've just created a one-hour commute to and from work, is that really going to benefit me and my family?" said David Lupberger, home improvement expert at Colorado-based ServiceMagic, which matches up consumers with contractors.

One benefit of renovation: You have creative control over the end product.

"When you do a renovation, you get what you like, whereas when you buy, it may not be exactly what you like," said Bert Tallaksen, owner of Tally's Construction in Tenafly, which did the Van Zilens' renovation. "When you renovate, it's you."

But even when everything goes smoothly, living through a renovation is never easy.

"It will disrupt every routine you have," Lupberger warns. "You've got strangers in your home every day. It's dusty. Materials are piled up. Your home is no longer a refuge."

If you redo your kitchen, you'll be eating pizza and takeout every night for a month or more, or whipping up meals in a microwave in the living room. Remodel the bathrooms, and you may find yourself showering at friends' houses for a week or two.

For all these reasons, when Lupberger worked as a remodeling contractor, he used to ask prospective clients: "Wouldn't it be easier to move?"

Nor is renovating cheap.

Bathroom renovations in North Jersey start at around $10,000 and kitchens start at around $20,000. An addition runs $120 to $130 per square foot. Of course, you can spend much more if you choose granite countertops, high-end appliances and other premium materials. On average, according to Remodeling magazine, kitchen renovations in the mid-Atlantic states run more than $56,000.

It all adds up to more than $200 billion a year spent on remodeling, according to the builders' association.

For these reasons, Lupberger advised homeowners to think twice about renovating if they plan to move within five years.

And what if your contractor turns out to be unreliable? Everyone has heard the stories of kitchens demolished, then abandoned, by unscrupulous contractors.

Lupberger says the homeowner can protect themselves by doing their homework before they choose a contractor. Ask friends and neighbors for recommendations, and check out a contractor's references. Ask the contractor for proof of insurance and for a schedule of when the project will be completed.

For all the expense and headaches of renovating, moving also has costs, both financial and psychological. Selling your old house and buying a new one will cost you thousands of dollars in closing costs fees for lawyers, real estate agents, mortgage application, realty transfer tax and more.

And while your house is on the market, you'll have to keep it clean constantly, and put up with strangers poking around all the time.

"You're living in a fishbowl," Beritelli warns.

So when the question is renovate vs. move, the answer is: There's no easy answer. Both renovating and moving involve cost and hassle. But as the Van Zilens and the Eliopouloses can tell you, either can bring you to the house you want.

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E-mail: lynn@northjersey.com

(SIDEBAR, page R01)

Tough decisions

Consider renovating if ...

* You love your neighborhood too much to leave.

* You have a reliable contractor.

* You can tolerate living in a construction site or moving out of the house for a while.

* You would like the challenge of creating exactly what you want.

Consider moving if...

* You want to change your location for example, in search of better schools or a shorter commute.

* You can't face the disruption of a renovation.

* Renovating to what you want would make your house very overpriced for your area.

* You're not confident you can find a reliable contractor.

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