Part 2: New Construction or Renovation? Which is for you?

Our last blog focused on choosing new construction versus renovating and remodeling an existing home. There are many benefits of moving forward with a new build, and after we wrote that piece, many felt pretty confident that a brand-new home would be top choice at this time. However, after thinking about the remodeled homes we have been fortunate to tour, and scouring many articles and before-after photos online in my preparation for this piece, many of us have reserved the right to change our mind. While a major remodel is a time-consuming and likely inconvenient venture, the results are downright spectacular in many cases.

Admittedly, so many of us are partial to older homes. Their character, unique features, ample space and storage, and established yards just speak to me in ways new construction does not. While we love the fresh start and literal “newness” of a new home, there is a quality it always lacks. We want to be fair in analysis, so like the last blog, we will go through the most important categories to consider in embarking upon a remodel, and to keep our thoughts organized, we're going to outline the same categories as last time, only now we will focus on remodeling an existing home – whether it’s your current house, a home on the market, or maybe even a historical property.

·         Meeting Code and Structural Soundness: The quality construction of a renovation is as important as its cosmetic appearance. Be sure your contractor has plans to show you, references, and a portfolio of work that mirror the vision for what you want upon completion of this project. What materials will be used? How will demolition and subsequent rebuilding be handled? How often will inspectors stop by to check in and ensure standards are met? Better yet, does your contractor note and explain building code during conversations about the renovation plans? Once you build trust in your contractor and his or her team, you can feel confident that the plans – no matter how extensive – will be carried out with the highest quality and safety concerns in mind. Just be ready for frequent visits and permitting hoops from your local building commission.

·         Short and Long-Term Costs: Compared to building, the short-term costs for remodeling tend to be higher. You can certainly get a loan for the work, but many contractors need deposits up-front to start the work, and all too often I have seen budgets creep up during projects due to unexpected issues or changes to plans. Extensive, high-end renovation jobs can often cost as much as building a new home (kitchen remodels alone average $50,000!) but in the long run, you should feel like the location, neighborhood, and “bones” of the home will be worth the monetary investment. One prime example we can share is a client’s current renovation project. They found that their 100-year-old home was tilting forward when they took out the old flooring. They had to completely replace the floor joists and most of the foundation – totally unexpected and quite expensive.

·         Return on Investment: There is a great deal of potential to turn a dated, crowded home into a showstopper after renovation. Many older homes do not boast the open concept, trendy finishes, and modern features homeowners expect today, but they do have character and other outstanding qualities that make them worth keeping. When an older home has been renovated in a way that updates it while maintaining its “old charm”, it has the potential to turn a major profit upon sale. It will either make a stunning home for those remodeling and planning to stay or move in, but it also offers a tremendous opportunity for the right investor with a vision. Let me just caution you though; take note of the block or neighborhood. Do not invest in a six-figure renovation only to price yourself out of the area. Set the bar high for the whole community, but be sure the renovation plans don’t outpace the rest of the area.

·         Location: The locations of homes worth remodeling tend to be one of the selling points in this venture. Older, established neighborhoods are well-placed in towns, have mature trees, larger lots, more space to enjoy. As communities grow, new subdivisions are developed outside of town or away from urban spread. Personal preference certainly plays a role in deciding what location is best for you, so think through where you want to be in relation to a downtown area or parks, schools, retail, etc. In many areas, the older neighborhoods are within walking distance of restaurants, shops, theaters, and more. Many people find that feature extremely attractive and decide to renovate a home to be near “the action”.

·         Efficiency and Technology: While new construction might be favorable to feature the newest home features, many of the things you might desire can still be installed in a renovation. The building materials play a major role in a home’s efficiency, so if you replace the roof or windows, or even major systems like HVAC and electrical, talk to your contractor about which options will be favorable for the home’s efficiency because an older home and its dated materials need all the help it can get to compete with new construction.

·           Design and Layout Options: Designers and general contractors are almost miracle workers. They do some absolutely incredible work to transform the worst spaces into stunning rooms. While they can make nearly any vision a reality, homeowners need to be aware that there could be limitations and unexpected adjustments that accompany a renovation that a new build wouldn’t face. Remember, a renovation is gutting an existing home, a structure with that already has wiring, support beams, plumbing pipes, and gas lines that may or may not be able to be moved. If they can be, it’s often very expensive, but worthwhile if your budget can handle the hit. I definitely recommend getting drafts of several renovation plans to consider and finding as many potential roadblocks as possible before getting started.

·         Long-term Maintenance: A home that undergone a major renovation still might require a bit more maintenance than a newly-constructed house. There will still be some “old” components in the home, so just keep an eye on what needs to be done on a monthly or annual basis. A renovation project does not come with a warranty like a brand-new home, so additional investments could be necessary if anything breaks down.  That possibility is certainly not a reason to shy away from renovation, but you must be aware and plan to care for an older home in a way that keeps it looking and aging its best.

What else are considerations you feel are important in this decision? Which side do you tend to lean toward? We'd love to know!