There are two main options available to you when you are looking to buy to sell.
The first is to renovate a home and the second is to build a brand new one. It is typically the older generation who lean more towards renovating. Modern buyers tend to think about the potential that comes with building a new home. There are advantages and disadvantages to both. Here, you will find the differences between the two and what you should think about before making a decision. The cost of renovation vs. building a new house is just one of them.
Savings Accounts ComparisonRates last updated August 29th, 2014.
Doing the Maths for the Future
If you are planning to stay in your home for less than five years, except for painting and other low-scale cosmetic touch-ups, when you decide to sell you will stand to recoup only about 50% of the cost of any renovations you may do. With kitchen and bath updates, you may recoup about 75% of your cost. Of course, you may have to redo the kitchen or bath just to ensure that you are able to sell a house in need of those renovations. So they may be necessary regardless. But, if you are going to be moving before five years are up, you'll come out ahead, or at least break even, by just redoing the painting, landscaping, or making other cosmetic enhancements.
Is It a House or a Home?
If you plan on staying in your house – if it is truly a home – renovating it to suit your present and future needs may be the cost-effective thing to do, rather than moving to a new abode. Many other question must be answered:
- How much is the land itself worth?
- How well-built is the present house?
- What is the present worth of the house?
- How much money do you have to spend?
- Are you trying to make a silk purse out of a sow's ear?
- How much renovation will you need to make it comfortable?
- How much experience do you have with renovation and design?
- Will renovating a house place it out of the range of other homes nearby?
- What's the state of major systems in the house – heating, plumbing, electrical?
- Of course, this list is not exhaustive.
You and your significant other will have to sit down, decide what you want to do, and then call in a number of contractors and get some estimates. At this point, or sometime soon thereafter, you will have to decide if you will need an architect or if a skilled contractor is competent enough to draw up the design of the renovation. A room addition, redoing the bath, or some other relatively minor operation may not require an architect.
Go House Hunting
Once you have enough cost or pricing estimates, you should go house hunting yourself. See how much of a new, or different, house you can buy with the sale price of the old house, along with the cost of the renovations you have in mind, as your top price. It may be cheaper to move.
Other things come in to play when you are deciding to renovate or build anew. They are not quite as tangible as bricks and boards:
What about transportation?
- What about nearness to shopping, work, and schools?
- Do you enjoy your neighbours and the neighbourhood?
- What will be the environmental impact of your remodelling?
- Do you have a place to decamp if and when any major renovation is under way?
- As above, this list is far from exhaustive.
Four Biggest Fears of Renovation
Renovation produces some awe-inspiring fortitude in the human spirit and some awe-inspiring degradations in the human character. The four biggest ordeals in any renovation include:
One website concerned with renovation versus building anew has this caveat:“Major renovations are stressful and some marriages have not survived the process.” Having to put up with a major readjustment in your daily routines and habits is hard to endure.
Sidestepping mud, dealing with missing walls, or scaling piled up boards after you come home from a hard day at work is no fun. As you can imagine, renovations during inclement or winter weather presents a unique set of problems. Imagine putting up with messes for any number of weeks, depending on the job.
No matter how carefully planned or well-thought out, there will be setbacks. Wiring assumed good will be frayed. Plumbing will burst. Materials will not arrive on time or be something other than what was ordered. If you are familiar with a certain Mr. Murphy, you must know that he will be present and enforcing his law during any renovation, large or small. And his stay is usually expensive.
You can and should check out references on any contractor you may be inclined to hire. Check the local chambers of commerce or better business bureaus to see if anything bad has been lodged against the contractor. You may find a great contractor, but what if he hires poor sub-contractors? Hope for and search for the best, expect the worse.
If your property is ideally located and you love the neighbourhood, but the house isn't worth a nickel, building anew would be your best bet. It may be easier than an extensive renovation in terms of stress and affecting your lifestyle. You will simply have to find a temporary residence. Keep in mind that getting a house built within six months is about the best that can happen. You will also need to employ the services of a architect if you want a truly custom home or if you are seeking to alter store-bought house plans. Again, finding the right builder is going to be the biggest challenge.
Truth and Its Consequences
As many reasons to renovate or build anew exist as there are home owners. Each embodies a particular, often peculiar,set of circumstances. And there are costs both up front and in the end – and a lot expenses in between – that have to be counted. The easiest moves by far are to buy an existing house or a new house already finished. Warranties, guarantees, and insurances are already in place to protect the potential owner. That's the truth. With renovation, you will just have to endure the consequences.
A Home to Enjoy or a House to Endure
Neither renovating or building anew is a walk in the park. No room exists in this article to specifically enumerate all the costs monetarily – or mentally – you may incur. Hopefully this gives you some idea of what you're up against, what you will have to endure, and what you have to do, to ensure that it turns into a winning enterprise that puts you in a home you can enjoy rather than a house you must endure.