Is It Cheaper To Remodel Or Build A New House?

Many homeowners are tasked with the question of whether it is more cost-effective to remodel an existing house or build a new one from scratch. The answer depends on a variety of factors such as cost and timeline, but also features like desired size and design. In this article, we explore the differences between remodeling and building from scratch, and provide an overview of what to consider when making the decision. Read on to learn more about how you can decide which option is best for your needs.

Bulldoze And Build New Vs. Remodel – Which Is Better?

Is bulldozing and constructing a new house better or is remodeling more recommended? There is an almost infinite list of views published on the internet so which one would you prefer? Your contractor will look at all the possibilities to help you make a wise decision when you take on a new project and offer friendly advice before you start on your dream house. 

Remodeling Cost: 

Remodeling a home you already own:

Remodeling varies from only repairing a couple of rooms to a top-to-bottom remodeling, it all depends on the house. If you’re only upgrading a few rooms like the kitchen and bathroom, it’s estimated that the cost is less than $100,000, but increasing the budget to $150,000 will make the budgeting process a little less rigid.

New roofing and siding for a home will add up an additional $40,000 to $80,000 to the budget for remodeling. A comprehensive remodeling is expected to cost anywhere between $140,000 and $230,000 for a typical 1,500 square foot home.

Most people assume remodeling is cheaper than building a new house for historical reasons. Larry Greene, president of Case Design/Remodeling in Indiana said, “Some older houses are made with higher-quality wood and have some finishing touches that you can’t replicate today.” Although that is only true if you already own the home, there’s no guarantee that the fixer-upper you may purchase would be costly or not.

Buying A Fixer-Upper To Remodel:

Before the remodeling, buying a fixer-upper house will end up costing more per square foot than building from scratch. The 2016 Paragon Real Estate Report estimated that the total cost before the remodeling was $920,000 for a San Francisco fixer-upper. Buying or constructing your own San Francisco house in 2017 would not be affordable to those making less than a six-figure salary. 

There’s a common misconception that in a historical sense, remodeling a house is less costly, which is valid if you already own the home. Tim Bakke, co-founder of The Design Series, a website devoted to house plans said, “While there are many homes and historical buildings that are 100, 200, or more years old and still in good condition, typically homes more than 75 years old or so need a critical eye, they need to have been very well taken care of.”

Rebuilding Cost:

Rebuilding can be a more economical route to take if money is a major concern for you, depending on how much work your home needs are. Larry Greene, chairman of Indiana’s Case Design / Remodeling said, “A teardown will allow you to build with modern materials and your home will likely be much more energy-efficient.”

If you own a historic home or live in a historic district, you would need to get approval from your state or local regulator or the local historic preservation board to knock down your house, even though you own it.

It is estimated that an average 1,500 square foot home would cost about $600,000 if it’s constructed on a $150,000 site. In the San Francisco Bay area, new residential construction costs $250-$300 per square foot, adding $450,000 to the 1,500 square foot house. The Bay area contributes a further $150,000 to $1,500,000 to the expense of building lots overall. Nobody unable to sustain a $1 million+ mortgage can afford this alternative.

Quick Notes:

When Should I Consider Remodeling Instead Of Rebuilding?

If you already own a home in a neighborhood with potential you like and would like to spend money in your home rather than the expense of closing / moving it. If no building lots are available in your ideal neighborhood. When property prices increase or home value is not at its peak.

When Should I Consider Rebuilding Instead Of Remodeling?

If the cost of remodeling your home outweighs the resale value, or whether there are building lots in your ideal neighborhood.

Which Would Cost Less Remodeling Or Rebuilding?

Overall, remodeling will cost you less than starting from scratch.

Which Is More Environmentally Friendly?

Building from scratch allows for greater control over energy usage and new buildings that are designed with energy conservation in mind to reduce long-term energy costs.

Remodeling your home can be a great way to invest in your property and increase its resale value. However, it is important to consider the costs of remodeling versus building a new home before making a decision. Ultimately, the answer to whether it is cheaper to remodel or build a new house depends on a variety of factors. If you are considering remodeling or building a new home, we would be happy to help you explore your options and find the best solution for your needs. Contact us today to learn more!