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Started By
Message
Sinking money into a makeover vs. selling (building/buying new)
Posted on 1/10/20 at 9:21 pm
Posted on 1/10/20 at 9:21 pm
Current situation, 11 year old house (structurally sound, no deficiencies, no major repairs, etc.). and have approximately 7 years left to pay at 2.875%. In great school district and low crime area. Rough equity percentage is approximately $210K and LTV, if I calculated correctly is 40 %. Only debt is our mortgage.
Houses in our neighborhood are selling for approximately $148 per sq. ft. while a brand new neighborhood less than 1/4 mile away is selling for $180 per sq. ft.
If I were to borrow again today, I am seeing 15 year rates right at or at less than 3 % (15 year is the only terms we will consider).
Here’s where we are on the fence. If we were to sink money into our house for a modest remodel vs. sell and build/buy new, mathematically speaking, where or how does someone sort this out in their mind? Take away the idea of most like new, I’m trying to figure out if it even makes sense to dump money into something that may not noticeably appreciate or could then potentially be “overbuilt “ for the neighborhood that we are in vs. building/buying something that fits our lifestyle today.
Again, I want to take emotion out of this as much as I can and try to figure out where the “smart-er” decision lies. Anyone who has been through this, in a similar situation such as the one I have described, I’d really like to hear your thoughts, steps and research you did to get to where you are today.
Houses in our neighborhood are selling for approximately $148 per sq. ft. while a brand new neighborhood less than 1/4 mile away is selling for $180 per sq. ft.
If I were to borrow again today, I am seeing 15 year rates right at or at less than 3 % (15 year is the only terms we will consider).
Here’s where we are on the fence. If we were to sink money into our house for a modest remodel vs. sell and build/buy new, mathematically speaking, where or how does someone sort this out in their mind? Take away the idea of most like new, I’m trying to figure out if it even makes sense to dump money into something that may not noticeably appreciate or could then potentially be “overbuilt “ for the neighborhood that we are in vs. building/buying something that fits our lifestyle today.
Again, I want to take emotion out of this as much as I can and try to figure out where the “smart-er” decision lies. Anyone who has been through this, in a similar situation such as the one I have described, I’d really like to hear your thoughts, steps and research you did to get to where you are today.
3
Posted on 1/10/20 at 9:28 pm to Will Cover
i just bought a house where i’m probably going to put about 125k into it. Building wasn’t an option and every house we looked at just didn’t fit our style . we found a house with great bones and now we can make it our own with our special touches.
having 125k equity in our current home helped our decision as we took a heloc out on it and will put it into the new one and then when we are move in ready we will sell our current house
having 125k equity in our current home helped our decision as we took a heloc out on it and will put it into the new one and then when we are move in ready we will sell our current house
Posted on 1/10/20 at 9:31 pm to CE Tiger
I think a lot depends on how much you like your current subdivision.
Posted on 1/10/20 at 9:39 pm to LSU1018
We really like our subdivision, specifically our neighbors. If we moved, we want to remain in same area / school district.
Posted on 1/10/20 at 10:26 pm to Will Cover
I would sell and move to the next neighborhood. I just don’t like the odds of your house value increasing by the same amount as your renovation will cost.
Posted on 1/11/20 at 7:14 am to Will Cover
quote:
We really like our subdivision, specifically our neighbors. If we moved, we want to remain in same area / school district.
Look hard at build quality. It’s hard to do things like update wiring, smoke detectors, etc in older homes but easy in new builds. But not all new builds are quality construction.
You gotta compare location, lot size, etc. for older homes.
Also cost in the moving expense and be honest about things like new furniture and other expenses to moving homes. You could easily have $5-10k in expenses just to switch homes that you wouldn’t necessarily account for.
Posted on 1/11/20 at 11:34 am to Will Cover
I don’t know your house but needing to “modestly” remodel any house at 11 years old seems crazy.
Other than a coat of paint, what else really needs to be redone at that age?
Also, don’t you have a huge pool/outdoor kitchen area iirc? How do you value that into the equation?
Other than a coat of paint, what else really needs to be redone at that age?
Also, don’t you have a huge pool/outdoor kitchen area iirc? How do you value that into the equation?
Posted on 1/11/20 at 12:45 pm to Croacka
quote:
I don’t know your house but needing to “modestly” remodel any house at 11 years old seems crazy.
Other than a coat of paint, what else really needs to be redone at that age?
Yes, fresh paint for sure, inside and out, plus wife is wanting to redo the kids bathroom and ours. And bathrooms aren’t usually too cheap. We also have an open floor plan concept and she now wants wall separation and a keeping area, which our house will not allow for it unless some major modifications were to occur.
quote:
Also, don’t you have a huge pool/outdoor kitchen area iirc? How do you value that into the equation?
Yes, we do. I didn’t factor that into cost per square foot and while I realize a pool may detour some buyers, their has to be some (I realize not much) value especially when you factor in outdoor kitchen. We spent 6 figures and if a person were to do this today on their own, for type of design and finishes we have, they would spend that as well. Not sure how you put a price tag on that?
This post was edited on 1/11/20 at 12:48 pm
Posted on 1/11/20 at 12:47 pm to Will Cover
May be worth it to look at getting a new wife? Lol jk
If you plan to do that much, I would definitely just look at moving.
If you plan to do that much, I would definitely just look at moving.
Posted on 1/11/20 at 6:29 pm to Will Cover
With that many changes, I’d get a new house.
Posted on 1/11/20 at 7:23 pm to Will Cover
You don’t get your dollar for dollar value but those looking for a pool and entertaining space will still pay extra for that. It’s just less people and not typically good return. With that said, wife and I will end up building a pool and outdoor kitchen still FML 
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