When It's Better To Buy A New Home Than Add To Your Existing One
There is a long running debate on whether it is best to add to an existing house or buy a bigger when you realize you need a bigger place. The truth is that there are advantages to both sides of the coin; it just depends on your particular circumstances. For example, here are some of the situations in which buying a new home makes sense:
You Have Future Plans Of Moving
The first thing you need to consider is whether you plan to stay in the same neighborhood for the foreseeable future or you can see yourself moving out at some point. If you have future plans of moving, then its best (economic wise) to move now rather than renovate the house only to get out of the place a few year later. Maybe you have been eyeing a better neighborhood with better schools and socioeconomic infrastructure. In that case, move to your desired neighborhood instead of wasting money on renovations.
The Renovation Involves Changing Floor Plans
You should also consider whether you can gain the additional living space without changing the floor plans. This is because any renovation project that involves changing the floor plans is more complicated and expensive than maintaining the floor plans. Therefore, if the renovation requires a change of the floor plan (or the local regulations demand it), it might be best to buy a new home.
You May End Up With a Lower Mortgage
Buying a new home can result in a cheaper mortgage, same mortgage or more expensive mortgage payments for you. This is something you need to consider before deciding whether to move or not. For example, you may be able to enjoy cheaper mortgage if your income to debt ratio has improved over the years or if the real estate market of your target location isn't as strong as that of your current place. In such a case, moving may be more attractive than staying since it may save you some money.
The Existing Property Is Aging
Lastly, it might also be in your best interest to buy a new house if the existing one is aging and nearing the end of its life. Renovating an aging house is not only costly, but it can also make the new one more dangerous and prone to breakdowns. You don't want to start a renovation project only to realize that the house is coming apart and the old plumbing, electrical and heating systems cannot be extended to the new part of the house without a complete overhaul.