Should I Build a New Home or Remodel an Existing Home?
So you’ve decided the home you currently live in doesn’t meet your needs and you haven’t found one that does. You have a big decision to make: should you build a new home, remodel your existing home, or find a home for sale on the market that you can purchase with the intention of remodeling? Here are some critical questions that may help with your decision:
STEP 1: Identify what you need from your home… and what you would love to have.
Start with your NEEDS.
Write down what you MUST HAVE in a home to accommodate your family. People often start with a number of bedrooms and bathrooms based on their family size. Do you need a home office, or a guest bedroom?
What about location? Consider the school district you want to live in and your ideal driving distance to the office or the kids’ school. Some other essentials include things like handicap accessibility for family members who need it, or room for farm animals and other pets.
Now move on to your WISH LIST.
Are you dreaming of a gourmet kitchen, entertaining space, maybe a master suite… these are all popular wish list items. Talk with your spouse or family members about what your ideal home would look like.
Identify your assets.
Compare your “dream home” with your current home or with homes you have seen for sale on the real estate market. How many items on your “needs list” does the home cover?
Remember the one thing that cannot be changed is LOCATION. Fortunately, if you have a home in an ideal location, you can usually add space and amenities for your household. Try to be objective! Many homeowners get so frustrated by the things that don’t work in their home that they can’t see the assets that it does have. Start thinking about the changes that would make the home work for you. What would it take to get you to stay in your current home, or buy a “fixer upper” in a great location?
STEP 2: Determine a realistic budget.
Budget is probably the single biggest factor that will determine your course of action. Sit down and look realistically at your finances and what you can afford. Look at your savings, your monthly income, your current debt, and the equity in your home. Some folks can afford to build the home they’ve always dreamed of. Many of us discover that we have to scale back, which may mean focusing on the “needs list” and letting go of or putting off some of the “wish list” items. Learn more about budgeting and financing for home projects.
STEP 3: Think about how the project will affect your family.
If you’ve never built a house or taken on a major remodeling project before, you may not realize how much building or renovating will disrupt your home life. Think through the process for each option, how it will affect your life, and for how long.
If you build a new home, will you have to sell your current home first? Where will you live in the mean time? Will you rent, or stay with relatives? Moving to a new area may change your school district, something you may not want to take on until your child graduates.
Living in a home that is being remodeled is stressful. If you are renovating your kitchen or a main bathroom, you won’t be able to use it. Consider how you will work around these issues and plan a work around. Major life changes, such as expecting a new baby, may cause you to speed up your timeline, put off your renovation, or change your game plan entirely.
If you have your eye on a “fixer upper” the same issues may apply. The real estate market can be unpredictable, so it’s impossible to know how long it will take for your current home to sell. On the flip side, you may have to sell your current home before renovations on the new home are complete. Can you move in and live through the renovation? Or will you have to move somewhere else temporarily?
Taking the time to determine what you need from your home, what you can afford, and what each of your options will mean for your family will make the decision much easier.
Check out the rest of our resources about the building and remodeling processes.