Unfortunately, the majority of homes aren’t quite as easy to stay up-to-date with modern styles as, say a car or your clothing. When you realize your home may be out of style or simply not fit for your lifestyle anymore, you could be faced with an important decision – should you remodel your house or build a new one?
There isn’t an easy answer to that question, because whatever you decide hinders on a number of factors, from home location to price to size and more. This guide will help you make a choice, while understanding some of the benefits and risks of home remodeling vs. new building. While we may not be able to provide a direct answer to your unique situation, we can help make your decision much easier.
Decide What’s Most Important To You
When picking between remodeling your existing house or moving to a new property, you should first narrow down the most important features you want in a home. Ask yourself how your existing house could be improved and the reasons you’re considering a change.
For example, if you’re planning on growing your family, your needs in a home may be drastically different from when you were single or only living with your spouse. Other homeowners may simply want to add a dose of luxury to their home, whether by adding bay windows, a master bedroom or even a pool.
Identifying your high-level goals when it comes to improving the look and functionality of your home is incredibly important, giving you the insight you need to make a more informed decision on remodeling vs. new building. Additionally, it helps you prioritize your project’s scope, timeframe, budget, and more.
Tearing Down a House: Protect Your Equity
When it comes to home remodeling, almost anything you’re dreaming of can be implemented by a skilled contractor – whether it’s adding a second floor, a new kitchen or a basement renovation. All it takes it the right financing to get the project started.
Almost all mortgages include clauses that dictate if you can tear down your home and rebuild on your plot of land. Many of these clauses include language indicated how soon the rebuilding process should begin after a tear down, as well. If allowed, lenders will often be involved in the whole process, guiding you through the technical details of demolishing your home.
If you decide to tear down a house, you may take a financial hit in terms of the equity you had built up in it. Once you demolish your house, you essentially remove the security your mortgage broker has for your loan and you must absorb the lost value when you lose equity in the building that is gone. When you demolish a home and build a new one, you’re responsible for construction costs. Additionally, it’s easy to dip into negative equity, which may prevent you from obtaining a home equity loan for your rebuilding needs.
To successfully tear down a home and build something new, you’ll likely need to open another mortgage and offer up a form of collateral, usually the new or renovated home, as well as some cash up-front.
It’s crucial that you carefully consider these financial decisions, looking at all options available to you. There are many types of loans out there, with both fixed and variable rates. A finance professional can help you obtain and submit a prequalification form that’s best for your situation.
When deciding on a home mortgage broker, you should keep some things in mind. Reach out to several companies or individuals so you have a wider selection of interest rates, repayment terms and fee schedules. Some lenders may offer you advantages such as no origination fees or early repayment penalties, which will ultimately save you money throughout the life of the loan.
It’s often easier to get a loan if you know how much value your new build or remodel will create. This is where a professional contracting company can provide help. A specialist can determine the cost vs. value of remodeling your existing home or tearing it down completely.
Determining a Timeframe
As you go through either a remodeling project or a new home build, your life is almost certainly going to be disrupted. No matter which path you choose to take, both remodeling and new building require time to get the job done correctly. Let’s take a look at how long you can expect each process to take.
Remodeling your home offers some time-saving benefits, because the target areas are often simply renovated, rather than completely torn down and rebuilt. If you take the appropriate planning measures, you can focus remodeling efforts in a more streamlined way. In general, a remodeling project normally takes anywhere from one week up to 10, depending on the work being performed. The longest projects tend to be major room overhauls and additions. Luckily, these types of renovations only put one area of the house out of commission, creating minimal disruption to your life.
Let’s discuss some specific remodeling projects so you have a better understanding of expected timelines. A bathroom renovation, for example, is typically the most disruptive type of home remodeling project, taking about two weeks to finish on average. While work is being done, you’ll experience interruptions like water being shut off, large portions of the house being inaccessible, and you’ll need to be completely out of the house while harmful fumes from some floor finishing solutions dissipate.
If you’re focusing on the exterior of your home, you’ll probably barely even notice any work is being done. Siding and roof installation, for example, most likely won’t require you to move to a hotel for a few weeks. In fact, the biggest distraction you’ll probably experience is noise – fortunately contractors work during the day.
Of course, a remodeling timeline isn’t always the optimal choice. Your home may be in need of multiple projects in order to create the space you’re truly dreaming of, and many of these projects can’t be done simultaneously. Sometimes, renovations and remodels take more time than building a new home would.
In general, new construction takes longer than a renovation and you’ll also have to find accommodations while your home is being demolished and rebuilt. You can expect a new home to take about six months from demolition to the final walk-through. There are ways to speed up the new construction process, such as by choosing a modular build. Conversely, a highly customized construction plan can largely increase the amount of time it takes to complete the home.
Below are a few key contributors to the amount of time it takes to rebuild a home:
- Desired home size
- Desired home layout, style and design
- Complexity of the construction plan
- The contractor you choose to work with
- Obtaining building permits and licenses
- The weather
There are so many moving parts when it comes to building a new home, much more so than with a remodel. In most cases, barring a major renovation, new construction will take significantly longer.
The Home Construction Process
Building a new home is one of the most exciting projects you can take-on within your lifetime – and there is plenty to consider before getting started. To help set your expectations for your dream project, below is a short outline of the new building process.
Before construction can start, you must find a licensed construction specialist to help you draft plans, obtain building permits, order materials and organize a crew of workers, among other things.
When plans have been signed off, you’ll break ground on your new home. In the first week of the project, your existing home is demolished and unneeded materials are removed. A crew brings in heavy-duty equipment, from wrecking balls to bulldozers to compactors, to excavate and level your property’s land. If you’re adding a basement, the ground is dug out and the main home footers are implemented.
Once the area around your home is cleared and leveled, the home foundation is laid. To ensure the foundation is properly built, a building inspector must conduct a walk-through of the site.
Once the inspector has signed off, the construction crew gets to work building the structure of your house, including rough outlines of doors, windows and interior walls emerge. Your roof is then installed and completed, requiring another professional inspection. When the structural integrity is approved, exterior walls are then built, letting you see the first true glimpse of your new home.
Now that your home has an exterior, plumbing, wiring and ventilation can be run. Again, all of this work will need to be inspected multiple times by a professional, meaning this part of the process is prone to delays.
After the plumbing and electrical systems are checked, the contractor installs insulation throughout the home. A great thing about a new home build is that you’ll likely see a reduction on your heating and cooling costs compared to a remodel. This is because you can properly insulate your entire home, attic and basement with the newest materials.
When the insulation is installed, drywall is then added to the interior of your home. This is where it all starts to come together. Once the drywall is installed, puttied, sanded and primed, you’ll get a feeling for what it will be like to actually live in the space.
The contractor then moves on to complete key interior details like trim, baseboards and flooring. At this point, everything from door frames, windows, molding, cabinets, backsplashes and floors are completed.
When the majority of the house has been assembled and finalized, the walls are painted and the house becomes a home. Additionally, any landscaping is done now that the property has more freed-up space.
Finally, the contractor will take his time and add the finishing touches. The team installs the necessary appliances and fixtures, your HVAC and water system are tested, and systems are adjusted to make your new home ready to be occupied.
Once all of the work is complete, final walk-throughs are conducted with inspectors, the contractor and of course, yourself, to ensure that home is safe and built to the specifications laid out in the contract. When all parties have agreed that the work meets expectations, the contractor hands over the keys to your new life.
How Long are You Planning on Living in Your Home?
Another important factor to consider in the remodeling vs. new building decision is how long you’re actually planning on living in your home after construction has taken place.
In terms of short-term benefits, remodels are the best choice because they focus on immediate returns and are generally paid for with existing equity. If you decide to build a new home, it can be harder to finance something so expensive, meaning the end value you receive from the house is lowered.
If you’re not staying in your home for more than seven years after the remodel, but still want to create a better living space, a remodel is most likely the best choice for you. Remodels are especially effective at increasing the short-term value of your home, meaning you could maximize its sales price and increase your return on investment.
Building a new house may be more costly than a remodel, however, if you plan on staying in your home for the long term, you’ll likely see it’s lifetime value rise. Additionally, you have a space that provides more enjoyment, without having to worry about recouping your money and equity in just a few years.
In most cases, a new home will carry a higher price tag than a remodeled home. If the housing market becomes hot, you can capitalize on the market and potentially make a hefty profit. When selling, you can also look at adjustable-rate mortgage refinancing that reduces your mortgage payments while your home is on the market.
Remodeling vs. New Building in Conclusion
While there is no cut-and-dry answer to whether you should choose building a new home or remodeling your existing one, there are plenty of benefits and risks to each approach depending on your unique situation. It takes careful analysis and a solid understanding of your future family and financial goals, desired construction timeline and weathering through a potentially long construction process to build the home you’re envisioning. But at the end of the day, it’s well worth having a space that you’ve always dreamt of living in, no matter how much time, energy and money it takes.
Contact Treasured Spaces for All Your Home Remodeling and New Construction Needs!
Now that you know these essential differences between remodeling an existing home and building a new one, reach out to Treasured Spaces today to get started with your construction project.
We’re the premier provider of home contracting services for all types of residential and commercial clients. If you’re ready to get started with building the home of your dreams, get in touch with one of our dedicated account managers today!