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Which makes more sense, move or remodel?

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Don't run from repairs
Sheehan conducted a study in 1998 commissioned by The Wall Street Journal which showed that maintaining a typical home more than 30 years often costs more than four times the original purchase price. A daunting figure, but Sheehan warns that maintenance alone is no reason to move. "The repair costs may be deferred in a new home, but you have to remember that a bigger house takes more upkeep and you may not be getting the benefit you think you are by moving," Sheehan says.

If you are moving to an existing home, rather than new construction, not only will it be bigger, it will also likely have the same maintenance issues your old house did, but on a larger scale. "It may even cost you even more," Sheehan says.

The emotional bottom line
With some financial decisions it makes sense to remove yourself emotionally and just do a cost analysis. Yet financial planner Ray Ferrara, president and CEO of ProVise Management Group in Clearwater, Fla. says a house is a different matter. "A home, while an investment, is really about lifestyle first and an investment second," he says. "The decision of moving vs. remodeling is: Does your current home, if remodeled, make you happy? If your home, even if remodeled, doesn't meet your needs, and if you can afford something else, then move."

Ferrara says many of his middle-age clients decide that moving makes more sense, even at a cost, because they are now in a position in their lives to pay a premium for happiness. "In your twenties or thirties you can't buy the home you want and are forced to buy something that might be smaller and less glamorous than you would like," he says. "But most of us come home seven days a week. And if you come in and say 'I love this place,' then there is a lot you can overlook. But if you walk in and say 'I hate this place,' then move."

The best thing to do often is to take a close look at what is getting under your skin, and if you can get a few more years out of the home with a remodel, that could be your best bet, Fritschen says. "I encourage people to step back and see the big picture rather than looking at any one thing," he says. "Don't say, 'Oh, my kitchen needs to be updated, I want to move.'"

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