If fixing up is your hobby go for that. For me I would not want to do all the work to fix up a house so I would move if I could afford it comfortably. On the other hand, you could look into cheaper space creation solutions. Just think what you need the space for and get creative.
I wouldn't say it's my hobby, but I am handy. Worked construction for a few years at one point and am capable in carpentry, drywall, painting, landscaping. When it comes to electric & plumbing, I leave that to the professionals, as I don't know what I'm doing.
Im not sure how you came up with the 60-80k renovation budget. Have you looked at what actually needs to be updated and what can just stay how it is. We are renovating our 1100 sf house and added a 2 stall garage for around $25K.
There are things I could do myself for sure. However, finding the time to do them is a different story. I realize some of the people on this forum are already "retired" and may have more time to learn these trades on their own, but I do still have a day-job (interesting work, but requires time) so free time comes on the evenings and weekends. I suppose I might just be making excuses, but I had a hard enough time writing this reply with my kids yelling at me to take them outside. Literally not kidding. With two small children, I'd be sacrificing time with them to make all the upgrades myself. Therefore, I do what I can do, and then have professionals do the rest.
Things we've already done:
- Stripped 60 year old wall paper and painted main level - 6K (took a crew of guys 1.5 weeks to do this. Worth every cent).
- Removed huge vinyl liner in-ground pool and leveled backyard (which is beautiful now, and safe for my children) - 10K
These are the things that need updating:
- Electric (complete rewire, all ungrounded outlets) - 10K
- Likely the furnace in the next few years - 3 - 5K
- Floors - 1 - 3k
- Bathroom (necessary) - 5 - 7K
- Kitchen (nice to have) - 10 - 20K
- Garage (current Garage is one car, and looks like it's about to fall down) - 15 - 25K (though I build garages in the past, won't have the time to build this myself in the near future)
- Finish basement (likely 1K cause I could do myself).
- Another bathroom (with 2 kids gonna grow up fast, one bathroom isn't likely to cut it). Not sure the cost of this, or even if there is room.
I see everyone's point about staying in the smaller home and coming up with creative ways to create space. Believe me, for the past few years I've complete been on the plan to financial independence (paid off all debt, saved emergency fund, maxed out retirement accounts, etc), but this feels like a good deal that could increase quality of life in the long-term. This home will go fast, I can guarantee it. This is why I'm torn.