Deciding to renovate a home or buy a new one comes with many factors for consideration. Homeowners may dream of living in a larger, brand new home, but may be unaware of the unforeseen costs of building. Likewise, homeowners can embark upon a remodel job and get caught by unexpected building code requirements that over-extend the budget. Making a decision to either remodel or build-new requires thorough planning and research.
Return On Investment
For remodeling considerations, the first step is to find out how much the market will bear after you add upgrades to the home. Obtaining a before-repair property value analysis on the home and then comparing that to an after-repair analysis can produce the estimated gain in value from improvements. If the total remodel cost is less than the difference between the before and after price of the home, remodeling might be a good idea. But if adding the updates is not justified by the end price, spending money on a remodel may not be cost effective.
Sometimes remodeling can be more time consuming or complicated than just starting from scratch. Existing building code violations such as wiring or plumbing issues will now be required by local authorities to be brought up to date. Additionally, homes built before 1978 may contain lead paint or asbestos. The cost of removal and replacement of these items can be very expensive and time consuming, and may require the help of a specialist.
Cost of Building
The cost of building is not always cut and dry, either. Many builders will display the “base” pricing, which only includes the standard features. It’s important to compare these features with any upgrade or option forms to evaluate which items are wanted or needed, and how much extra that will cost on top of the standard price. Buyers thinking of building should also consider additional features such as landscaping, fencing, blinds and curtains, or moving costs that may not be initially factored into the total price.
Financing options can many times be a deciding factor. Homeowners who have the choice of re-financing the total cost of repairs into the balance of a new home loan may find it beneficial to remodel. Others who need to either pay cash or take out a separate loan for repairs may wish to sell and build new. Current interest rates for a new home purchase compared to a home re-finance loan can vary, and homeowners may wish to study current interest rates to determine which route makes the most sense in the long-run.
Quality Of Life
Although both options are wrought with a lot of hard work, the result can be very rewarding and fulfilling. This, of course, should be the final goal. Owners making this decision should not forget those things in life that simply bring happiness. People who truly love their home and neighbors should take that into consideration. Whichever the choice is, it’s helpful to remember that sometimes spending a little more money to ensure qualify of life makes more sense than being frugal. It can be important to weigh every advantage and disadvantage, large or small.