Renovate vs Build a New Home
September 30, 2024
Renovate vs Build a New Home
If you’re considering building a new home vs a renovation to your existing home, this information is for YOU!
What is Your Current Living Situation?
Do any of these look familiar?
You love your neighborhood, your schools, your commute. That’s why you bought the house in the first place, correct? Lately, though, your kids are growing up and need more space for all their ‘stuff’. Your parents want to visit, but where will they stay? You’re working from home now and your desk is tucked away in your bedroom or is your kitchen table. Wouldn’t it be nice to have a little more space and maybe even a little more storage?
What Options Do We Have?
- Buy a Pre-Existing Home in your neighborhood…this is faster, but you may need to compromise on design and features that you’d like. Maybe you’ll renovate in the future. I
- Buy a New Home in a new location…you’ll have to change schools, meet new neighbors, and your commute might change drastically.
- Renovate Your Current Home…okay, let’s put an addition on and maybe add a bathroom.
- Build a New Home…if you build, you can select a pre-designed model from a builder or design a custom home. Your dream home.
The first two options are fast, but expensive. You’re essentially buying retail with no built-in equity. You’re changing your community and everything that is familiar to your family.
So, let’s dive into the last two options: renovate vs. build new. Here is an example of a typical Northern VA home in Arlington or Fairfax County:
| Older home in Falls Church, VA | Brighton model in Falls Church, VA |
| RENOVATE | BUILD NEW |
| Home is still considered 50+ years old Structural elements untouched Utility services not upgraded Asbestos or other hazardous materials No warranty Cost overruns can be 25% or more! Original Budget of $490,000+25% = $612,500 | Home is NEW throughout Built to current building codes New utility services All existing material removed New home warranty Limited cost overruns Total New Home Cost = $600,000 |
| 4400 total SF 4 Bedrooms 3.5 Bathrooms 2-Car Garage | 5000 total SF 6 Bedrooms 5 Bathrooms 2-Car Garage |
| Original Value $750,000 1600 New SF @ $200/SF $320,000 Add 2-Car Garage $50,000 2400 SF Reno @ $50/SF $120,000 Total Cost for Addition/Reno $490,000 | Original Value $750,000 Base Price of new home $360,000 Finished Bsmt (incl options) $140,000 Sitework $100,000 Total Cost for New Home $600,000 |
Here’s the real kicker:
| RENOVATE | BUILD NEW |
| New Value of Home $1,200,000 Increase in Value $550,000 Increase in Equity $60,000 | New Value of Home $1,600,000 Increase in Value $850,000 Increase in Equity $250,000 |
How Does Financing Work?
Financing for building a home can be different from traditional mortgages. Here are a few options:
- Construction Loan: A short-term loan that covers the cost of the home during construction. Once the house is complete, it converts to a regular mortgage.
- End Loan: If you’re using a builder, you might only need a traditional mortgage after the home is built.
- Owner Financing: If you have land and intend to build, you could seek financing directly from a builder.
Why Choose Classic?
Reputation
- Over 1,700 homes built since 1983 – we’ve been in business for over 40 years!
- Debt-free, family-owned – the owners are involved in the whole process
Experience
- We have built homes in Arlington, Fairfax, Loudoun, Prince William, Stafford, Spotsylvania, and Fauquier Counties. We’ve seen it all.
- Diverse team with extensive experience in navigating local building codes and requirements and formal knowledge in structural design and engineering
Customization
- We offer semi-custom or fully custom homes, allowing you to adjust designs based on your needs.
- Your home, your way – you dream it, we build it.
- Custom home without the custom home price
End-to-End Service
- From site work to design and construction, we often oversee the entire process.
Call us to discuss your dream home!
Tags: renovate vs buildCategorized in: Custom Home Tips, Design Tips, New Home Tips, Uncategorized
This post was written by Classic Homes
