|There are three possible scenarios involved in that question:
1. Stay where you are and renovate
2. Move to an existing house and renovate
3. Build a new house for you to move into
|There are numerous considerations, not the least of which is how you feel about your existing location. That word – LOCATION – should be your primary focus. Do you prefer to remain where you are, or not? Is staying where you are an option, or are you forced to relocate due to a job change, or other issues?
If you wish to stay where you are, there’s no reason to read this article. Remodeling and/or expanding the place where you now live is the least expensive alternative – by far.
Your aggravation levels will increase during the construction, but they will do that with either of the other choices as well. If it gets to be too much, you can move to a motel for 2 months, eat dinner out every night, and still come out cheaper than either option 2 or option 3. If you want to be in your present home, case closed.
So let’s assume you have to move, and we’ll concentrate on option 2 vs. option 3. There are two important aspects of this topic which apply to both.
• In both cases you have to research the property with the building department to make sure you will be able to do what you wish. Verify zoning, lot size restrictions, and access to utilities.
• You will have unknown costs (moving, insurance, taxes, financing costs, etc.) in either case.
Advantages of remodeling an existing house:
• Fewer hidden (or unknown) costs. New homes often have impact fees, ground preparation fees, and higher permit fees than those imposed for remodeling.
• Hard construction costs will be less (usually, but not always).
• You can move into the house much sooner. If you have to leave your existing home quickly, you may not have the ability to wait for a new home to be built.
Advantages of building new:
• Unrestricted design potential, allowing you to end up with a more modern, better insulated home, with better traffic flow than you would have in an older building. Also, older homes have less closet/storage space than new ones.
• Your long term energy costs will be lower because all of your equipment will be running more efficiently.
• Less disruption to family routine. While construction is happening, you’re still living in your present house. Then you move into a finished product (possibly with some decorative items to complete).
I’m sure you noticed that I haven’t listed costs in either list. The determining factor is going to be the extent of the renovation to the existing building. Depending upon the condition of the house, age, building codes and other factors, it can actually be more costly to remodel than to build new.
In either case, allow an extra 20% in your budget over and above any quoted costs you’ve obtained. 10% is for upgrades that you decide upon after initial pricing. The other 10% is for the rising costs of material and labor. If the price of oil goes through the roof again, 10% might not be enough.
If the older home was built between 1950 and 1978, there might be issues having to do with asbestos and lead paint. Make sure you get a professional inspection performed. You may also be required to bring the plumbing and electrical systems up to date.
In conclusion, renovating a home might be very rewarding, as well as the cheaper alternative. However, you have to do your homework before making the commitment, in order to insure that you’re not stepping into a money pit. Every situation is different. Your decision will probably come down to what your sixth sense tells you. Regardless of how you choose, anticipate that moving into a new home will take more time and more money than expected.