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norwegiangirl

07:45AM | 08/12/04
Member Since: 08/11/04
7 lifetime posts
Bvdecor
This question is haunting me: at what point does it make financial sense to rebuild, as opposed to remodel?

I think we answered this question wrong, and are now stuck with a house that will never be what we want it to be, no matter how much we fix it up.

We started with a 1970's split-level on a narrow, sloping lot. Ugly. But terrific views: because we're on a hill overlooking another (unbuildable) hill, we see no neighbors, and very likely never will. We bought this house 12 years ago because we fell in love with the lot and could afford the ridiculously low $105,000 price. The neighborhood is not the best, however (the poorer neighbor of an extremely wealthy college town 4 minutes away, where we work), and the zoning is transitional -- a red flag of uncertainty about the future.

The house itself was tacky, old, outdated, and oriented in a way that blocked some of the nicest views.

In 2002 we started to plan to tear down and rebuild. Because of the difficult lot and some special needs, we found we needed an architect. We'd been looking at thousands of houseplans, none worked. However, after spending $10,000 in architect's fees, and countless hours working on this, we realized that the house plan we got was just too big: I think edging towards 3,000 feet including garage, with a cost estimate of $450,000. Yikes.

We looked at our situation again. Did we want to stay in this neighborhood? None of our friends lived there. We decided we should try to sell the house, and either rebuild or buy something in one of the neighborhoods where we actually wanted to live. We scrapped the house plans and decided to do only necessary cosmetic remodeling.

Here's what happened. We couldn't find any house we liked in the areas where we wanted to live for less than $550,000. Even then, the houses were always missing that lovely view and nature we had at our own house -- or were way out in nowhere. Land was simply not available.

Meanwhile, as part of our renovation on our old house, we were replacing a back porch with an addition -- probably a mistake, but at the time we were still living there, and had been living in unacceptable conditions for way, way too long. We could be living there for years more and had family pressures.

As the renovation progressed, our house began to become liveable, even pleasant. Now we couldn't leave it! We love the land, the closeness to town, and would have to make big sacrifices, pay lots more money, in order to move somewhere else.

But in deciding to stay, we realized we had now cut off the previous option of tearing down and rebuilding. With the addition and changes we'd already done, we'd take a huge financial loss by tearing the house down -- never mind the environmental waste.

So, this is where we ended up: we've replaced the siding, the heating system, completely redone the kitchen, moved and redone one of the bathrooms, changed the trim, changed all the windows (!), changed most of the doors, added on an entrance, refinished the hardwood floors, retiled the roof. Total cost: around $140,000.

I feel like our house is the tin man from the Wizard of Oz -- we've gradually replaced every single part of it, bit by bit.

It's so obvious what we should have done, had we known we would end up here: tear down and rebuild. Keep looking through published houseplans for however long it took until we found one that was reasonable. Hire an architect only to make sure it could be adapted to our lot and for accessibility.

Our house now is orders of magnitude nicer. But it will never have a second story, bigger bedrooms, an attached garage, etc. In short, it will never be the house we would have designed ourselves. And for only 100,000-150,000 more, we could have had that house. That would have been a stretch, but within reason.

Does anyone have anything to say? Is there some methodical way we could have approached the rebuild vs. remodel question, to come up with the right answer ahead of time and not after the fact? There's nothing I can do now, but the question keeps nagging at me.

Or does anyone just have a kind word to make me feel better about this?


norwegiangirl

07:53AM | 08/12/04
Member Since: 08/11/04
7 lifetime posts
The house is a 3-bedroom, 2-bath.

k2

09:01AM | 08/12/04
Member Since: 06/06/03
1250 lifetime posts
Welcome Norwegiangirl,

An opinion from one who's not a pro, but one who's been in your shoes:

Actually I do have some kind words for you!

I am a strong believer in LOCATION, LOCATION, LOCATION. By this I mean that people will pay PLENTY to be in better neighborhoods.

So in this regard my opinion is that you haven't made a mistake! To have spent $450K on rebuilding the house would've been a mistake given the neighborhood. (What are houses around you going for? If it's $200K, then $450 plus what you've already put into it, well, you get the idea.)

As for the $ you've put into it, this may not be out of line for the neighborhood (Again, what are houses around you going for?)

OK, so what makes for LOCATION, or a better neighborhood? It ain't views (great though yours might be). To me LOCATION means: a more educated population. Houses around you cost plenty, and hopefully more than yours. It's quiet and safe to walk around after dark. Things are well kept and there are few rentals. Stuff like that.

Being 4 minutes away from such a neighborhood--it might as well be 4 hours.

As for the $ you've put into it, don't forget that you get the benefit of living there and the day-to-day enjoyment of living in better digs than you first moved into. Plus, the $140k does add value to your house for resale (whereas $400K+ would proably go mostly to waste). People will pay SOME premium for a better house in a lower-end neighborhood.

And (as you suggest) it costs money, time and effort to move as well. Consider a real estate company's commission, ouch! Plus it's a stressful time.

As for the Wizard-of-Oz Tin Man effect--believe me, this ain't at all unusual! Don't forget that there's no such thing as a "perfect" house. Things do need updating/replacing over the years.

My wife and I talked years ago about building a 'dream' house. I am so glad we didn't. For one thing, our definition of dream has changed over the years. Plus, there's living through construction!

Does this help at all? Please post a reply, and maybe your region; perhaps others can assist with more details.

Good luck and try not to fret too much...

Regards,

-k2 in CO

Moderator, Miscellaneous Forum

http://www.bobvila.com/BBS/Miscellaneous

norwegiangirl

09:43AM | 08/12/04
Member Since: 08/11/04
7 lifetime posts
Thank you, k2!!!

You have no idea how much I needed to hear that. You're exactly right -- when we saw the $450 pricetag, we balked, because we knew it would be a mistake to build that kind of house in our neighborhood.

Looking back I do see ways we might have come up with a house plan more in our range, and still rebuilt. But that's after an agonizing year and a half of learning everything about houses, starting from zero.

Houses in our neighborhood go in the $200-350K range. Houses in our actual work/social neighborhood -- where we wanted to live -- go for $400,000-$1,000,000+. The region is New Hampshire, Dartmouth College and the surrounding area -- which is having a HUGE run-up in real estate prices due to the construction of what must be the most beautiful medical complex in the world. Tremendous influx of wealthy retirees, doctors, professors.

Our neighborhood is one of the forgotten step-children here, historically blue-collar (now a mixture of everything). It may gentrify further, or it may not. It's definitely safe, but on the wrong side of the social divide. Some of our neighbors are sketchy in a rural kind of way, but it's mostly an aesthetic/resale issue.

I definitely felt it was the wrong thing to do, to rebuild the kind of house we wanted in this neighborhood... but then we ended up spending so much money anyway! The whole thing feels messy, chaotic, poorly planned, no mattter how hard we tried.

You know what it is, that keeps getting to me? It's overhearing our subcontractors talking about how they would have torn the whole thing down, so it could have been done right to begin with :)

Anonymous

12:28PM | 08/12/04
Hi again norwegiangirl,

I don't think I'd pay too much attention to those subcontractors' opinions here. For one thing, what they'd say and what they'd actually DO are 2 completely different things. And for another, it is YOUR home and your money.

Not to mention that it doesn't often make sense to scrape and start over--at least in my opinion.

As for "learning everything about houses" I hear ya! We had an old farmhouse over 12 years ago in the Seattle area. Like yours, it had lots going for it (nice views, 3 acres, etc.) It was great but a largely working-class subdivision had been built nearby. We figured out rather quickly that we'd update it but not break the bank on it. On the "wrong side of the social divide," as you say. And we made out OK on it when we sold--certainly didn't make any killing.

In the meantime, it's possible that your neighborhood could just become more desireable--what with all that growth nearby and all. Not all those incoming folks will be able (or want) to spend those big prices in that $500K neighborhood. Neighborhood changes are long-term (years) and it can be hard to see change in "real time." One of the best indicators is lots of building and remodeling in your neighborhood.

And as for those so-called "top" neighborhoods, I've noticed that they tend to stay that way year after year. And that even if lucky enough to be in one of them--it doesn't guarantee that you'll like your next door neighbor!

k2

12:44PM | 08/12/04
Member Since: 06/06/03
1250 lifetime posts
Well I had put in another response to you but this BBS "lost" it and replaced it with a phantom post from Anonymous :( There are still a few bugs in it, unfortunately!

I'll try and synopsize:

I wouldn't worry too much about the feelings of the subcontractors here. It's YOUR home. For one thing, they should respect that. And I really don't see "scraping off" being a cost effective solution unless a house is pretty bad off. I also think that what they (subcontractors) say and what they'd actually DO would be two totally different things!

Also, I mentioned that your neighborhood might just improve! With all that influx, some of it might spill over. Not everyone moving in can afford (or will want to pay) the $500K+ price tag in the center of things. Hopefully you'll see signs of improving right around you -- building additions, etc.

And, even if you're fortunate enough to live in a "top" neighborhood, it doesn't guarantee you'll like your next door neigbbor.

Regards,

-k2 in CO

Moderator, Miscellaneous Forum

http://www.bobvila.com/BBS/Miscellaneous

kdmicro

10:45AM | 10/08/04
Member Since: 10/07/04
8 lifetime posts
I was reading this post as I am going through the same process you are. I hope you'll be reading this as the last post was in August.

Anyway, I bought a 55 yr old 1 3/4 storey house 8 years ago. The houses in this neighborhood sell like hot cakes. Are they the nicest & newest design? No. But are they in a great neighborhood--yes! I live in a residential neighborhood that used to be a military airport in WWII. It was converted into a residential area in 1949. The houses were built & sold to the military & eventually sold to civilians 30 years ago. There are 3 main styles of homes.

I always wanted to live here because they designed it a bit differently. The "front" of the house actually faces the back yard (our kitchen is in the front of the house & dinig room in the back). The streets are built in a horshoe sharpe so your yard faces another back yard & gives a sense of more space--open concept style. There are paved walkways at the end of the yard that takes you all along the neighborhood and hooks up to other trails & a nice park & school playground area. It is ideal for children and very quiet & safe. It is nestled behind 3 busy streets of traffic, but amazingly it feels & sounds like you are in the country. There are tree lined streets and lots of large mature trees and shrubs everywhere. A lot of people have natural hedges around their property.

It is very central with 2 schools, shopping, etc in this area.

Anyway, I never thought I could afford to be here on 1 salary..but one day I contacted a real estate agent who should be some listings and there was a house in here that they had listed $10,000 below appraisal value(it was worth 129,000 back then)...I went to take a look and it looked pretty dated inside...chocolate brown carpets, olive green carpets, gold shag rug in the dining room!, wood paneling on the walls, wallpaper with gold palm trees...etc, old kitchen, old bathroom, strange plumbing. I found all kinds of realtor cards on the table..people had taken a look but wouldn't buy it.

Anyway, I lifted a small piece of carpet & found harwood floors everywhere! It had a fireplace, it had plenty of character. So I bought the house...and today it would be worth at least $265-275,000+ 8 years later! I renovated the kitchen (sunk lots of $$ into a smaller "dream" kitchen), new deck, refinished the floors, fixed the front porch, new paint job, new roof, oil tank, etc, etc. Now I am about to tackle the main bathroom.

Was it worth it?? After reading your post I have to say YES b/c I have the BEST nieghbors in a WONDERFUL neighborhood. They have been so supportive of the renovations b/c they saw the house when it needed TLC. So that speaks volumes.

Do I dream of a new home? Yes, & will probably always do that. It is funny b/c the neighbors across the street tore down a house similar to this & rebuilt a huge house new. I couldn't afford that at the time. I may build new some day, but the more I fix it up here, the more character it takes on.

Things can change & maybe I will relocate...but I won't move to another neigborhood unless it is as nice as this one!!! It was voted the #1 place to live in the capital city of our area. Everyone around me is renovating too!....

Some days I want something brand new, designed the way I want. Unless a nice piece of land opens up that is centrally located, I'll stay here & keep renovating!!

Good luck,

K

k2

04:58PM | 10/08/04
Member Since: 06/06/03
1250 lifetime posts
Hi kdmicro,

Thanks for your addition to this old post. I think some of these older posts should get revisions/updates from time to time.

I guess I'm in a similar "boat." Neighborhood is great--I just wish all my neighbors were as great as yours. I guess my experience with neighbors is that "There's always ONE..." I just wish everyone could just live in harmony...but alas, this is delusional--given the world we live in.

One thing I come back to: if you have to MOVE, this is a large "stressor"--one of the biggest stresses one encounters in life. To add on, remodel, etc....this is stressful--but probaly not to the degree of moving.

I like your attitude! Stay put....and remodel, renovate, etc. You can always take a break and "come up for air" every few years!

Thanks for your post, and welcome to the forum!

Regards,

-k2 in CO

Moderator, Miscellaneous Forum

http://www.bobvila.com/BBS/Miscellaneous

dimdem

08:54AM | 12/05/04
Member Since: 12/04/04
1 lifetime posts
We are debating the same question right now. We have a house that was orignally a 2 bedroom bungalow. A previous owner added a third bedroom, a bathroom, and a small family room. It is still a little small for us, though. We really need a 4th bedroom (no kids, but two home offices) and the current kitchen is just too small. I don't expect us to do anything major for several years, but I am weighing this rebuild/remodel question now because it makes a difference to what we do in terms of fixing up the house in the short term. Do we do the very minimum to the bathroom that needs to be touched up, planning on it disappearing someday anyway, or do we sink more money into it? The only thing that makes me hesitate about adding on is that I am not just not the original layout of the house really lends itself to remodeling. It will never fool anyone into thinking that it was done that way to start with.

Or should we just move? :) The only problem with that is that we like the location too well; we wouldn't want to move more than a couple of blocks.

kdmicro

03:39AM | 12/08/04
Member Since: 10/07/04
8 lifetime posts
A follow up to my 1 1/2 storey house that needed some TLC updates inside. Well what a huge difference the bathroom remodel did! It is just beautiful...and it does not seem too small to me. The bathroom is 8X7, but with the right layout, it works very well. Getting a toilet with a smaller tank & centering it better between the vanity & wall made the room look bigger. I also bought the largest recessed medicine cabinet (looks like a nice picture frame ) over the vanity. Again little tricks can fool the eye into believing you have added space. It paid off!

I went a step further & decided to redo the 11 x 16 L/R with new furniture, entertainment center,etc. Wow, it looks like a new house again. I actually had a designer friend come in to help rearrange the items in the room. Utilizing & maximizing your space for a small room is key.I had a propane insert installed & had a custom woodworker reface my old brick fireplace with a beautiful white wood mantle & granite tile to frame the insert & for the hearth. It is gorgeous. Now I don't want to move for a very long time---it's amazing what updates can do for a smaller space!

Good luck for anyone out there dealing with smaller rooms--you can create your own style with the furnishings & with proper planning, make it a home to be proud of :)

kd
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