Should you renovate a home or start over from scratch?
You are about to realize your goal to own a lake house. You have pored over listings and gotten way too familiar with your Realtor while trekking across your target area seeing all sorts of homes and lots. And you found it – the perfect lot in the perfect location. The problem? The lot has an old house on it that isn’t what you had in mind. Maybe it needs so much TLC you don’t know if it’s worth salvaging. Or maybe it’s not your taste, so you consider whether you can update it.
With an older home, the debate comes down to: love it or level it? Here are some questions to ask to help with what can seem like a daunting decision.
Determine all options
Before you can make any plans, and perhaps even before you purchase the property, you need to determine your actual options.
- Is the property in a development where new construction might not be permitted — or where any renovations need to be approved by the HOA’s architectural committee?
- Are there any ordinances that might impact both new construction and extensive renovations? What are you allowed to do with a remodel?
- Can you go higher or extend the footprint of the house?
Ask yourself what specifically you want to renovate, whether it is even possible, and if the expense makes sense. Some issues like low ceilings and a too-low basement incur significant costs to change.
Another potential hurdle – your lender. Remember that a mortgage is a loan taken against the equity of the home. If you have plans to demolish the home, you need to discuss those plans with the lender.
What you find out will determine next steps. Assuming you have the choice to do either a teardown or renovations, there are additional issues to ponder.
Structurally sound
Is the foundation damaged with cracks or buckling? Are there any significant structural issues with the wall and ceiling supports? Is there extensive mold or infestation damage?
Consider also what the previous owner may have done – or not – to the house. There’s damage to the home from neglect and age, and there’s the damage inflicted by enthusiastic, but unskilled DIYers who may have made “improvements” that are anything but. A home inspection and a skilled contractor prove invaluable in such situations.
If the repairs are simply too much, or the house is so structurally unstable that large-scale renovations aren’t possible, you may need a teardown. If repairs are within budget and timing isn’t an issue, you have the option to renovate.
Bear in mind that renovations can be more costly than new construction; however, you can parse the changes out over a number of years to suit your budget. At the same time, consider whether it would cost less to tear it down and rebuild – even if you forfeit immediate time in the house.
You will not want to go through this process without a trusted contractor by your side. The contractor will not only examine the property but give estimates for repairs and renovations. Concurrently, you will want to examine costs of hiring an architect and get additional estimates from your contractor if you decide to begin from scratch.
Appealing attributes
What do you love about the home? Its character? Or its location? If you love the location and don’t really care for the home’s character, that may signal a teardown. But if you find yourself drawn to the charming details of the home, and it’s preventing you from making a more logical (and financially sound) decision to tear it down, maybe there’s a middle ground.
Can you salvage any of the details that make it charming? Can you reclaim wood floors? Reglaze vintage sinks and tubs? Find creative uses for older stained-glass windows? We’ve all seen plenty of home renovation shows where salvaging key elements from the older home allows vintage charm to blossom in a newly constructed home.
Final factors
If you still can’t decide what to do, another factor to consider is how long you plan to use the house. Long-term, defined by 10 years or more by many experts? Then you should consider tearing down and rebuilding. Older houses will just get older, with repairs and investments every year to keep it up to snuff. If your home is already older, you might be looking at more costs over the long term than new construction.
On the flip side, if you are only looking at owning the home for 5-10 years, you might want to do just enough renovations to keep up with the neighborhood standards. Take some time to get to know the neighborhood. Where does the house fall within the spectrum of nearby homes? Are you buying the oldest, most run-down house on a block of newer builds? Then your resale might be impacted. Or are the other houses from the same era, just in better shape? Then keep up with the Joneses enough to make sure your home compares well relative to other nearby homes for future resale.
Either way, you’ll have the shorter-term benefits of visiting your lake house, and when you are ready to move on, you’ll be able to maintain your property values and pass the home on to the next owner to enjoy. ✦