Every homeowner that lives in an existing home long enough will face the question; should we execute a major home renovation vs new construction of a custom home.
Either new construction or renovation will take time to design and plan. We will evaluate the pros and cons of each of these options.
Is your existing home facing the renovation vs new construction dilemma?
With time, the once perfect-looking house may develop issues due to wear and tear, which if not addressed in time, can snowball into a major problem and an even larger expense.
In case you want to live in a completely new dwelling with no vestiges of the past, there will be options for you to choose – whether to select a major renovation vs new construction.
Since building a home in a different location can be an extremely costly proposition, it is best to consider the pros and cons of selecting between a renovation vs new construction.
There are plentiful reasons why a renovation of your property can keep you in good stead vis-a-vis building or buying a house in a different location.
You may read our builders resources on home renovation and learn about the process details such as preparing, planning, checking feasibility, and benefits.
Learn About The Pros and Cons of Deciding Between a Renovation Vs New Construction
Evaluation Factors for Renovation vs New Construction
- Location
- Financial Feasibility
- Avoiding Structural Changes
- Home values
- Long-term Plan
- Property Taxes
These are many of the common factors to consider when evaluating renovation vs new construction;
Location: If you are living in your house for a long period of time and are fond of the neighborhood, it is better to stay put there and initiate remodeling of your property by engaging professional construction services.
Financial feasibility: Buying a property in a different location and then home building is a costly proposition, which can only be considered if you have the budget. Otherwise, it is cheaper to renovate and transform your existing house into looking new, almost.
Avoiding structural changes: If you do not make any structural changes to your existing property and stick to renovations like changing its floor, pillars, roof, etc., the overall improvement cost can be reduced by as much as 50%.
Home values: Depending on the type of remodeling you undertake, either the value of your home can increase or the money spent can simply go down the drain. So, it is better to consult a remodeling contractor who has the experience and expertise in remodeling contracting to know whether the renovation will add value.
Long-term plan: While considering renovating, you should have a long-term plan. For instance, should you have a two-bedroom house and aim to have kids, then sooner or later, the living space will fall short for the family. In such a situation, renovating your existing two-room house can backfire in the long term.
Property taxes: The rates of property taxes can differ across states, cities, and counties. So, when contemplating moving to a different location and building or buying a home, think about the additional property tax you need to pay. On the other hand, by renovating your existing home, you can continue to pay slightly more in property taxes compared to home building.
What are the pros and cons of new construction and remodeling?
Post reading the above-mentioned pointers, you may lean towards one decision or the other. However, it is better to delve deeper and study the pros and cons of both decisions. You may read us to know how home contractors can help with home contracting for new house construction.
New Construction
Relocating to a new residence by selling your existing home can be an arduous and time-consuming process. However, once done, it can have its advantages as mentioned below:
Pros
Beginning anew:
Home contracting a new house can be an experience in itself. You get to meet new people and start life anew, which can be exhilarating if the people in the neighborhood are friendly. You can decorate the house according to your wish and let it stand out in different landscapes, towns, counties, cities, or states.
Finance options:
Since you already have experience with the purchase process and paperwork involved with your existing house, you will find it easier to go through everything all over again for the new construction in Houston or in any other location.
Better, hire the services of an agent to address issues related to taxes, insurance, and title. Also, you may approach a bank or financial institution to finance the purchase of your home construction.
Income tax:
Even if you sell your existing property, you need not pay any added taxes thanks to the capital gains exemption to the tune of $250,000 (and $500,000 for married people).
Further, should your house qualify for using eco-friendly features, you can avail eco-related tax credits as well. It is better to ask your real estate agent or tax filer about the same.
Fits your lifestyle better:
If you have moved up the career ladder with new responsibilities to shoulder, your existing home with limited space, utility, and aesthetics can be a problem. Imagine calling your business partner or client to your existing home with limited capacity for lunch/dinner and failing to make an impression.
On the other hand, after a home builds to your specifications with trendy features and cool aesthetics, you can have plenty of things to impress your client.
Family Convenience:
When home contracting for new construction, it is far more convenient for your family to live in your existing house while home building than the inconvenience of living through a remodeling project.
Cons
Adapting to the new place:
In your built home in a different neighborhood, county, city, or state, you need time to adjust to the surroundings, including the neighborhood.
What if the people are not as friendly as you expected while buying or building the house? You and your family may not adapt to the new property in a reasonable time like ducks to water. Consequently, you may end up missing the old place and run it for a lifetime.
Costly:
In addition to incurring a huge cost towards buying a new home or land and then building new construction, you need to pay the real estate agent the brokerage for selling your existing home. The entire process can be time taking, expensive, and complex.
Moreover, the accumulated capital gains accrued from selling your existing property can be lost in buying a different house.
Movement hassles:
Moving to a different location lock, stock, and barrel can be a cumbersome process entailing a lot of preparation and execution. Think of sorting and packing everything, arranging the logistics, and moving to your built house. Thereafter, unpacking the stuff and rearranging in your house can be tiresome exercise.
Renovation
As mentioned earlier, renovating your existing home can allow you to create newly created spaces, enhance its utility, and meet your requirements. However, it may have its cons as well. Let us discuss the pros and cons of renovating your home in some detail. Also, in case you want to make good use of the available space in your existing house, read our blog on home additions.
Pros
Costs less:
Renovating your existing home is less costly compared to building new construction in Houston or any other place. Since during renovation, you need not remodel everything from scratch but only the things or areas you need to, the budget can be less.
Adding a personal touch:
You may have a fascination for specific features or fixtures that you can incorporate into your existing house through renovation. It is better than buying a new house where there may be some unwanted features.
So, why buy a home after spending huge sums of money only to be updating it later instead of renovating your existing home and transforming it for the better?
The other benefits of renovating your home are:
- Increase the value of your house
- Increase energy efficiency and reduce utility cost
- Transform your house into a comfortable space
- Reduce any maintenance cost
- Optimize the use of storage and space
- Do away with obsolete features or products
- Improve the aesthetics – interior and exterior
- Create a safe environment for everyone, especially seniors
- Recreate a better place of living you can be proud of
Cons
No major overhaul:
If you want your existing house to be transformed in every possible way and make it look entirely different, then you may hit a cul-de-sac. It does not make sense to spend huge sums of money on changing every single room in your existing house when you can buy a new house with the latest features.
Financing blues:
In case you choose to renovate your existing house, then obtaining finances for the same may not be a cakewalk. And should you have not lived in the house for long, then getting a home loan might be difficult.
Construction hassles:
Hiring construction services to renovate your existing home can mean hassles for you and your family for months. You may choose to shift to another place or hotel thereby increasing your expenses or endure the home renovation being carried out while you continue to live on the premises.
Conclusion
As a homeowner, you must weigh the pros and cons of renovation vs new construction, and choose the one that suits your budget and other considerations mentioned in this blog.
So, whichever option you choose, hire experienced professional building contractors and do the necessary paperwork. You may read a blog to know further about choosing renovation vs new construction.
