Make it Work or Move On?:
Renovation vs. New Construction
Should you invest in your current home or start over somewhere new?
Many homeowners find themselves asking this question when they’re living in a home that is either outdated or no longer functioning for their lifestyle. Unfortunately, there’s no clear-cut answer. It depends entirely on your personal situation.
In some cases, it’s more cost-effective to remodel, and you may end up with exactly what you want without having to move anywhere. But in other situations, you could end up sinking a ton of money into your house and still not be happy, and you would have been better off finding something move-in ready, or building a custom home.
Here are five questions I like to ask homeowners in this predicament:
What’s your time frame?
Remodeling a home takes time, and the length of time depends on the project. A full-scale bathroom remodel typically takes 4 1/2 weeks, which means that there will be about a month you have to live with one less bathroom.
A kitchen remodel takes roughly 4-6 weeks, and again, you’re put out for the duration of the project. Other projects can take anywhere from one week to one month or longer, but will probably be much less disruptive to your daily life.
Moving into a new home will also take some time. It’s taking longer and longer to close on a house these days—up to 50 days on average. (Although when we buy homes, we close with all cash offers, so we can be ready to close in as little as two weeks.)
And then there’s the custom build option, which will take seven months once you have the land. So, it’s completely up to you and your timeframe.
How long will you stay?
It’s important when contemplating a remodel to think about how long you’re going to live in your home after the renovation project is completed. Remodeling your current home typically happens against existing equity with a focus on immediate returns, which means you’ll get the biggest bang for your buck the sooner you sell the house. If you want to recoup your money and equity, you typically need to sell your house within the first five or so years after a remodel.
If you build new, you’ll probably see more cost up front, but you’ll also enjoy a better lifetime value.
How much can you spend?
You have to be prepared for surprises when you start renovating and tearing down walls, especially if you live in an older home. There could be termite damage, water damage, old electrical issues or even structural inadequacies that make it next to impossible to stay on budget. I always tell my clients to be prepared for those types of situations.
New construction has its costs as well, but those should all be known upfront.
How happy are you in your current home?
Maybe you own a historic home and you’re enamored with its character and charm. Or perhaps the home has some quirks or features that you would never find in any other home. If you’re emotionally tied to the home, it’s probably smarter for you to renovate, even if it would be less expensive to just go find another, more functional home.
If you don’t have those emotional ties, however, you should know that it’s generally much easier to design a building with a specific purpose in mind than to convert a building intended for a different use.
What’s the condition of your current home?
While any home can be remodeled, not all homes should be remodeled. Sometimes the improvements that you’re seeking aren’t possible with the existing house footprint. Sometimes there are structural issues that make a renovation an unwise choice for financial reasons. Sometimes certain walls can’t come down easily, or ceilings can’t be raised without removing and rebuilding the floors above them.
In those cases, you may need to find a different house to fall in love with, or build the one you want.
Which option is best for you?
Without a pair of glasses that see into the future, how are homeowners supposed to make a decision with complete confidence? How do you know you’re making the most financially sound investment? How can you be sure you’re getting the most bang for your buck? Ask yourselves these questions, and then give me a call! I will help guide you in the direction that’s best for you and your family.
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