Seeking input on home dilemma: Modify or Move?
Every year after Christmas the wife and I have long discussions about what we want to do in the next year.
Here's the basic stats: We're both in our mid-50's, kids are grown and out of the house (2 kids, 3 grandkids, all hers from previous marriage.) We live in an older part of Englewood that's still a pretty nice neighborhood. We've been together for 11 years now and married for 8.
House is an older ranch-style, smallish (1100 square feet.) 3 BR and 1 Bath (yes, ONE bath.)
Back in 2008 right after I moved in, we did major renovations to the house. We walled off the old 1 car attached garage and made it our "utility room" (basically like our basement. It is not connected to the rest of the house and you enter it from the back porch.) We put in an oversized, detached 2 car garage that comfortably accommodates our 2 of our 4 SUVs, my two motorcycles and lots of other stuff. We're on a big lot with a long concrete drive that accommodates our other vehicles and our two trailers (travel trailer and utility trailer. Yes, we have a lot of license plates. :D ) We also had new siding put on the house, all new windows, a new furnace, and a new roof. In 2009 we put in a new water heater and in 2012 we completely renovated the kitchen with new cabinets, new appliances and granite counters.
The dilemma is this: At 1100 square feet, the house is feeling too small, especially when we entertain. We have one living room that basically feels like a hallway (it's probably not more than 18' x 22') Having only one bathroom is a real problem, and furthermore our bathroom is very, very small and designed in such a way that the configuration cannot be changed without major renovations.
We LOVE our brand new kitchen, and of course, I LOVE my big garage. But other than that, and the fact that my wife has lived in this house since 1981 (when she was 18 and moved in with her first husband) there's not much to keep us here.
We have been considering a few options.
Option 1 would be a MAJOR renovation. We would either pop the top (not my preference as I like living in a house with no stairs) or (more likely) pop out the rear wall and extend the house rearward. We would enlarge the master bedroom, add a bathroom that is big enough to be ADA compliant, and most likely add another "great room" out the back in between the house and the detached garage to give us living and entertainment space. We haven't talked to a contractor yet but I'm assuming this project would take 3 - 6 months and most likely cost on the order of $100k.
Option 2 would be to simply fix the few little things around the house that need fixing, put it up for sale and buy another house that has the features we need (2000 - 2600 square feet, 3+ bedrooms, 2+ baths, 2+ car garage with RV storage on-property, large enough room for us to entertain 25 - 30 guests, etc.) Property in our neighborhood seems to be going for a pretty penny (the house across the street sold for $340k in June and it was TRASHED when they sold it. It was, however, bigger than ours and had 2 baths. It only had a 1 car garage though.) Our most conservative estimate is that we could sell our current house for around $300 - $325k and we have found quite a few houses that fit our requirements in the $375k - $450k range.
The advantage for Option 1 (besides the obvious one of not moving!) is that we know this house really well (as I said, the wife has been here for 36 years!) and there are no "surprises" for us. The furnace and other appliances are in good shape, there are no issues with leaking or flooding, and we know and like our neighbors (well, most of them...) If we "built out" we could get exactly what we want as far as living space, bathroom, etc. The downside is obviously the hassle of doing all this work, and the possibility that the "livability" will be compromised while construction is ongoing. Also I learned from experience with our garage/window/furnace/siding project that sometimes "managing" contractors is an exhausting job itself!
The advantage for Option 2 would be the ability to move right into another place that suits us. Our credit is actually good enough that we are considering buying first and then not selling until we are fully moved into the new house - our mortgage payments are low enough and we earn enough that we could manage that. The downside is that, potentially, the bottom could drop out of the market at the wrong time making it difficult for us to sell or putting us in a position where we end up selling for way less than we were planning, which gives us a much higher mortgage on the "new" house than we had planned and potentially leaving us "house poor."
So for those of you that have had similar dilemmas, what do you think? At this point we're both leaning heavily towards option 2. We only owe about $50k on our current house and we both have excellent credit. As a plus, I'm a veteran who has never bought a home before so I would qualify for VA financing if we need it.
Anyway, I'd appreciate any input.
