fix or sell?
January 22, 2009 5:50 AM Subscribe
i am trying to decide whether it makes more sense (financially) to renovate our house or sell it and start over somewhere else.
obviously there are all sorts of intangibles whose worth only i can determine. but assuming all psychological tradeoffs between this place and a new place are equal, here's the situation:
we have a small 2-bedroom house in a transitional neighborhood. the biggest minus is that it's on a flood plain and heavy rains turn our back yard into a lake for a day or two. not a huge deal, but we have dogs.
the plus is that we are, unlike 99% of americans, living beneath our means and can save, which is important to us. still, for long-term happiness, there are some changes that we'd like to make (installing a second bathroom, replacing the deck, turning the garage into another room, etc.).
assuming the cost of the renovations would equal the cost of a down payment on a new house, which makes more sense? the house next door, which is similar to ours, has been on the market for six months, so we are not optimistic about being able to sell anytime soon.
obviously, you are not a real estate agent or anything like that. i'm just looking for some guidance about how to think about the question and weigh the criteria.
obviously there are all sorts of intangibles whose worth only i can determine. but assuming all psychological tradeoffs between this place and a new place are equal, here's the situation:
we have a small 2-bedroom house in a transitional neighborhood. the biggest minus is that it's on a flood plain and heavy rains turn our back yard into a lake for a day or two. not a huge deal, but we have dogs.
the plus is that we are, unlike 99% of americans, living beneath our means and can save, which is important to us. still, for long-term happiness, there are some changes that we'd like to make (installing a second bathroom, replacing the deck, turning the garage into another room, etc.).
assuming the cost of the renovations would equal the cost of a down payment on a new house, which makes more sense? the house next door, which is similar to ours, has been on the market for six months, so we are not optimistic about being able to sell anytime soon.
obviously, you are not a real estate agent or anything like that. i'm just looking for some guidance about how to think about the question and weigh the criteria.
I say renovate also. But check with a real estate expert first, who can tell you where to put your money to get the most return. There are many many articles online that will help guide you, and used magazines at the library are a great resource. There are so many renovations that will return 85% of your investment, and if you do the labor then your return will be that much more. If you add the things you want, and keep a close eye on the resale value, you'll accomplish both goals of making your home more suitable for you and also increasing your chances of a quick resale when the time comes. Plus, you'll get the satisfaction of making a very wise choice as you navigate through these trying times.
posted by raisingsand at 6:24 AM on January 22, 2009
posted by raisingsand at 6:24 AM on January 22, 2009
We are also living beneath our means but struggling with a constant tug inside that we should be hopping in this market to something bigger and better but I'm terrified of losing my job and then losing everything (my current housing situation is a tiny place in a safe neighborhood that is so cheap we could just live here for years on savings...but we won't be having any house parties for more than 3 people anytime soon, lol).
My family has always been of the thought that in unstable times "It's much cheaper to work with what you've got and know than to buy something unknown."
Now granted, as you've pointed out, there are tons of other psychological factors, but realize that while your next house might not turn into a lake for two days a year, you *know* this house. By moving into a new place, you run the risk factor that not only will you be paying 2 mortgages (if your other place doesn't sell) but the new place might have other problems that you only find out in the worst case scenario (shot heating system, leaky ceilings, etc.).
If you bought something new, too, you face the additional worry that values might continue to go down.
I suggest that you stay put for now, and start with the renovations that add the most value (like turning the garage into another room and adding a second bathroom)...go slowly, and do a great job. Consider coming up with a construction project for a place for the dogs to go when the backyard floods (the new owners will probably appreciate that, too!). Enjoy each other in the process, enjoy saving as much money on the renovations as possible, and be comfortable and satisfied knowing that you're not in debt, you're stable, and you're preparing yourself and your family to be better able to sell your house in the future, while also improving your own personal quality of life.
posted by citystalk at 6:28 AM on January 22, 2009
My family has always been of the thought that in unstable times "It's much cheaper to work with what you've got and know than to buy something unknown."
Now granted, as you've pointed out, there are tons of other psychological factors, but realize that while your next house might not turn into a lake for two days a year, you *know* this house. By moving into a new place, you run the risk factor that not only will you be paying 2 mortgages (if your other place doesn't sell) but the new place might have other problems that you only find out in the worst case scenario (shot heating system, leaky ceilings, etc.).
If you bought something new, too, you face the additional worry that values might continue to go down.
I suggest that you stay put for now, and start with the renovations that add the most value (like turning the garage into another room and adding a second bathroom)...go slowly, and do a great job. Consider coming up with a construction project for a place for the dogs to go when the backyard floods (the new owners will probably appreciate that, too!). Enjoy each other in the process, enjoy saving as much money on the renovations as possible, and be comfortable and satisfied knowing that you're not in debt, you're stable, and you're preparing yourself and your family to be better able to sell your house in the future, while also improving your own personal quality of life.
posted by citystalk at 6:28 AM on January 22, 2009
I think the financial aspect is a wash. Although the market is way down now, someday it will rebound, and you can recoup the renovation expenses when you sell. To me, the question sounds like “Can we put up with the place the way it is”? If the answer is no, and the house is structurally sound, then I would go ahead with the renovations. The first thing I would investigate would be solving the water problem. It might be worth hiring an engineer to assess the situation. Perhaps you could put in a berm, or just a foot or so of topsoil, with some drainage.
Turning the garage into another room can be tricky. I would try to do it in a manner that allows for a new owner to easily convert it back to a garage. We did this for a house we had in Austin. We turned the garage into a family/game room, but retained the framing for the garage door (and kept the old door). This turned out to be smart, since the buyer really wanted a garage for his classic car. YMMV
Basically, I feel that both ideas have merit, but if selling the present home is the only way to finance a new one, I would think long and hard about selling in this market.
posted by lobstah at 6:29 AM on January 22, 2009
Turning the garage into another room can be tricky. I would try to do it in a manner that allows for a new owner to easily convert it back to a garage. We did this for a house we had in Austin. We turned the garage into a family/game room, but retained the framing for the garage door (and kept the old door). This turned out to be smart, since the buyer really wanted a garage for his classic car. YMMV
Basically, I feel that both ideas have merit, but if selling the present home is the only way to finance a new one, I would think long and hard about selling in this market.
posted by lobstah at 6:29 AM on January 22, 2009
The market for houses in your price range is still there, but you will be getting substantially less money than the listed price for the house next door (that's what being on the market for 6 months tells me). If that's acceptable than by all means sell. However, if you choose to renovate I would suggest having the home inspected first just so you know what has to be done to make it salable before you start adding the things you consider interesting. It would be a shame to spend energy on a major remodel only to have to put in a bunch more to overcome some deficiency when you decided to put it on the market.
posted by ptm at 6:32 AM on January 22, 2009
posted by ptm at 6:32 AM on January 22, 2009
My advice is to keep your renovations "modest". Sometimes people put luxury fixtures/cabinetry/etc. into a home and later find out that they can't sell their home for a price that would allow them to get their money back out of the renovation.
Having painted every room in all 3 homes I have owned, I recommend Sherwin-Williams paint. It covers better and you'll need fewer coats. Worth every penny.
Also, talk to a professional landscaper about potentially creating some kind of drainage in your backyard. You'll appreciate it, and landscaping almost always has a good return on investment.
posted by Fleebnork at 6:41 AM on January 22, 2009 [1 favorite]
Having painted every room in all 3 homes I have owned, I recommend Sherwin-Williams paint. It covers better and you'll need fewer coats. Worth every penny.
Also, talk to a professional landscaper about potentially creating some kind of drainage in your backyard. You'll appreciate it, and landscaping almost always has a good return on investment.
posted by Fleebnork at 6:41 AM on January 22, 2009 [1 favorite]
Freakishly, my wife and I live in a small 2BR in a periodically flooded, low-lying area (our backyard becomes a lake now and then), with a dog, in a neighborhood that could be called 'transitional.' I've also done (and continue to do) a fair bit of work on the house. I've completely remodeled the bathroom, extended hvac ducts to the unheated 2nd floor, poured a new concrete patio and finished the garage as a heated, insulated workshop. So I have an idea of where you're at. Unfortunately I don't know for sure whether it made financial sense for me to do all of this. We do like that it's allowed us to stay in a neighborhood we like, maintain relationships and feel at home.
I think one key is to not improve the house to the extent that it outstrips the neighborhood, because that's the point at which the effect of improvements on resale value diminishes sharply.
posted by jon1270 at 6:43 AM on January 22, 2009 [1 favorite]
I think one key is to not improve the house to the extent that it outstrips the neighborhood, because that's the point at which the effect of improvements on resale value diminishes sharply.
posted by jon1270 at 6:43 AM on January 22, 2009 [1 favorite]
lobstah has the right idea. The best thing you can spend your money on is getting your house out of the flood plain. Federal flood insurance isn't that expensive, but "flood plain" is a big red flag for buyers. Most civil engineers in land development or storm water management should be able to handle the application, but you'll want one with experience with the LOMA or LOMR-F process, since it can be tricky. Best case is that your property is miscategorized and you just submit a revised survey, but more than likely you'll need to add fill or take some other measures.
posted by electroboy at 6:44 AM on January 22, 2009
posted by electroboy at 6:44 AM on January 22, 2009
The problem with renovations is mission creep. If you know your house inside and out - down to the current condition of framing and plumbing - the temptation to fix something "while you're at it" might be reduced. If you don't know things like this, it is time to find out.
Some jurisdictions require bringing a house up to current code if the permitted work is more than x% of the house's fair market value. Verify that your renovations won't trigger such an expensive project, because (just for example) adding fire sprinklers to an existing structure can cost tens of thousands of dollars.
posted by jet_silver at 6:47 AM on January 22, 2009 [1 favorite]
Some jurisdictions require bringing a house up to current code if the permitted work is more than x% of the house's fair market value. Verify that your renovations won't trigger such an expensive project, because (just for example) adding fire sprinklers to an existing structure can cost tens of thousands of dollars.
posted by jet_silver at 6:47 AM on January 22, 2009 [1 favorite]
assuming the cost of the renovations would equal the cost of a down payment on a new house
First, is this a correct assumption? Are you basing this on discussions with contractors, or if you are DIY-ing it, bids from building supply places? Or are you just sort of assuming "hey, both are expensive, so it washes out?"
Second, are you adding in the transactional costs of house buying and selling? You know, loan fees, agent commissions, etc? And the buffer for the unexpected costs that come with every new house, like the furnace crapping out in the first month?
My point here is that the financial side may be much less equal than you are assuming it to be, and getting accurate numbers (including what your current house might realistically sell for, which won't be much if the neighbor's house is any guide) may provide a lot of clarity to this decision.
posted by Forktine at 6:52 AM on January 22, 2009
First, is this a correct assumption? Are you basing this on discussions with contractors, or if you are DIY-ing it, bids from building supply places? Or are you just sort of assuming "hey, both are expensive, so it washes out?"
Second, are you adding in the transactional costs of house buying and selling? You know, loan fees, agent commissions, etc? And the buffer for the unexpected costs that come with every new house, like the furnace crapping out in the first month?
My point here is that the financial side may be much less equal than you are assuming it to be, and getting accurate numbers (including what your current house might realistically sell for, which won't be much if the neighbor's house is any guide) may provide a lot of clarity to this decision.
posted by Forktine at 6:52 AM on January 22, 2009
How long have you lived in your house? With the renovations, how long could you live there? In my situation - small cheap house, in a goodish location (I could probably sell my house for a lot more than I paid, but it might take a while) I would probably renovate.
It seems that If I were going to pay, say, $50,000 on renovations vs. $50,000 on a new down payment, I'd end up better with option A because I've already lived in my house for 11 years. I'd have a $50K better house, with still only 19 yrs left to pay on it. If I moved, I'd have a $50K better house with a new 30 mortgage. I'd rather have a smallish, but okay house that's paid off when I'm 55 than a new house that will be paid off when I'm 66. I don't know at what point this would cease to matter - if you've only owned your house for 5 years, it may be not a concern. And with the old smaller house, I can pay down that mortgage even sooner because of the cheaper note.
Note: I have no real estate knowledge at all. This may well be the dumbest answer in the history of AskMe, for all I know.
posted by artychoke at 7:03 AM on January 22, 2009
It seems that If I were going to pay, say, $50,000 on renovations vs. $50,000 on a new down payment, I'd end up better with option A because I've already lived in my house for 11 years. I'd have a $50K better house, with still only 19 yrs left to pay on it. If I moved, I'd have a $50K better house with a new 30 mortgage. I'd rather have a smallish, but okay house that's paid off when I'm 55 than a new house that will be paid off when I'm 66. I don't know at what point this would cease to matter - if you've only owned your house for 5 years, it may be not a concern. And with the old smaller house, I can pay down that mortgage even sooner because of the cheaper note.
Note: I have no real estate knowledge at all. This may well be the dumbest answer in the history of AskMe, for all I know.
posted by artychoke at 7:03 AM on January 22, 2009
Can you rent your current house? Transition neighborhoods are usually prime rental zones. If so you can buy new at today's low prices and hopefully sell your current house in the future when real estate is moving more quickly. Also, repairs you make to a rental property are deductible business expenses. It may require a refinancing on your current house though as most mortgages for a primary residence do not allow rentals. That is not so bad though as this is a great time to refinance and I am pretty sure any fees you incur would also be deductible. You can have your cake and eat it too sometimes.
posted by caddis at 7:33 AM on January 22, 2009
posted by caddis at 7:33 AM on January 22, 2009
Like jet_silver says, try to really think out the project so that you are really nailing down as many of the "if we're doing x, we might as well do y at the same time" and make the hard decisions now.
If you decide to hire contractors, I have one bit of advice that worked well for us. After choosing the contractor, don't agree to pay any sort of large deposit on the job. Tell him to give you a list of supplies. Buying the supplies yourself removes any justification he has for asking for a large deposit and gives you the flexibility to hire somebody else if it's not working out. If you wrote him a cheque, he'd just use it to finish the work on somebody else's job. Of course, he'd send a couple of guys to rip out half a wall at your place, but wouldn't return until he needed the cash.
Then work out a payment schedule with milestones that you can both agree on.
posted by bonobothegreat at 7:34 AM on January 22, 2009
If you decide to hire contractors, I have one bit of advice that worked well for us. After choosing the contractor, don't agree to pay any sort of large deposit on the job. Tell him to give you a list of supplies. Buying the supplies yourself removes any justification he has for asking for a large deposit and gives you the flexibility to hire somebody else if it's not working out. If you wrote him a cheque, he'd just use it to finish the work on somebody else's job. Of course, he'd send a couple of guys to rip out half a wall at your place, but wouldn't return until he needed the cash.
Then work out a payment schedule with milestones that you can both agree on.
posted by bonobothegreat at 7:34 AM on January 22, 2009
Best answer: I am writing quick and unedited, please forgive minor spelling and grammer issues. :)
That's a big assumption you start off with and it's dangerous, as a contractor for many years (and the husband of an interior designer who tore up our apartment three times) it is a mistake to start with the assumption that your renovations will "wash", you can very easily over renovate for your neighborhood unless you are willing to stay in your place for 10-15 years.
But as the economists say, ceteris parabus - all things being equal - it is better to renovate in this market mostly because you can CUSTOMIZE what you want and to how you live. That is customize the finishes (tiles, flooring, type of counters etc.) You could look for a new place forever that doesn't quite you as closely as the glove of renovation.
Forget ceteris parabus: first get the data, organize your possible decisions, don't assume construction costs. Write up a basic "scope of work" list of what you want done and get a few contractors to give you an estimate/scope of work details. In this market they will be tripping over themselves to get to you.
With the reno estimates in hand (including estimated time of completion because disruption of other "soft" costs of the new place like closing fees, lawyer, moving, some minor reno like a touch up painting of the new place.
THEN talk to a real estate agent about two things - first the estimated sale price of you house as is versus the sale price post renovation. Dont ask them if the reno is worth it, they are not partial. They make their money from sales and it's unfair to ask them for an honest opinion when they may not be compensated.
The overriding point here is that your ceteris parabus assumption is dangerous and you may not really have an idea what your "down payment" money can actually buy in renovations or the dangers of creating a "garage Mahal" (my wife's trademarking that I think!) that does not effectively add to your home's value.
Good luck, write me with any questions.
posted by Kensational at 7:37 AM on January 22, 2009 [2 favorites]
That's a big assumption you start off with and it's dangerous, as a contractor for many years (and the husband of an interior designer who tore up our apartment three times) it is a mistake to start with the assumption that your renovations will "wash", you can very easily over renovate for your neighborhood unless you are willing to stay in your place for 10-15 years.
But as the economists say, ceteris parabus - all things being equal - it is better to renovate in this market mostly because you can CUSTOMIZE what you want and to how you live. That is customize the finishes (tiles, flooring, type of counters etc.) You could look for a new place forever that doesn't quite you as closely as the glove of renovation.
Forget ceteris parabus: first get the data, organize your possible decisions, don't assume construction costs. Write up a basic "scope of work" list of what you want done and get a few contractors to give you an estimate/scope of work details. In this market they will be tripping over themselves to get to you.
With the reno estimates in hand (including estimated time of completion because disruption of other "soft" costs of the new place like closing fees, lawyer, moving, some minor reno like a touch up painting of the new place.
THEN talk to a real estate agent about two things - first the estimated sale price of you house as is versus the sale price post renovation. Dont ask them if the reno is worth it, they are not partial. They make their money from sales and it's unfair to ask them for an honest opinion when they may not be compensated.
The overriding point here is that your ceteris parabus assumption is dangerous and you may not really have an idea what your "down payment" money can actually buy in renovations or the dangers of creating a "garage Mahal" (my wife's trademarking that I think!) that does not effectively add to your home's value.
Good luck, write me with any questions.
posted by Kensational at 7:37 AM on January 22, 2009 [2 favorites]
Response by poster: great thoughts, everyone. you're right, we do need more detailed information from contractors and stuff. and yes, we will get those things. but these are all good thoughts and i hope you keep them coming.
here's a bit more info about our situation:
renovations that would happen even if we sold the house tomorrow: painting pretty much everything including cabinets, replacing the deck.
renovations that would have to happen to make the next 3 years happy: all the above, plus fixing the flood problem in the yard, upgrading our furniture
if we stay for 10 years, we'd have to do all the above plus: refinishing or replacing about 700 sq feet of floor, insulating our garage and laundry room and installing a half-bath (we only have 1 bathroom).
we definitely don't have very lofty goals for the place--it's in the middle of the pack for the neighborhood, and if we don't stay here forever, we just want to sharpen it up and make it more comfortable. there's a lot we could do, but probably won't bother.
posted by thinkingwoman at 8:23 AM on January 22, 2009
here's a bit more info about our situation:
renovations that would happen even if we sold the house tomorrow: painting pretty much everything including cabinets, replacing the deck.
renovations that would have to happen to make the next 3 years happy: all the above, plus fixing the flood problem in the yard, upgrading our furniture
if we stay for 10 years, we'd have to do all the above plus: refinishing or replacing about 700 sq feet of floor, insulating our garage and laundry room and installing a half-bath (we only have 1 bathroom).
we definitely don't have very lofty goals for the place--it's in the middle of the pack for the neighborhood, and if we don't stay here forever, we just want to sharpen it up and make it more comfortable. there's a lot we could do, but probably won't bother.
posted by thinkingwoman at 8:23 AM on January 22, 2009
Sounds like you've got solid advice and your plans seem pretty sensible for potential renovations. The only thing I see missing is what about the neighborhood itself? Do you like it? Do you like your neighbors, amenities, access to activities and work. Are the schools good if you have or are planning on children?
Balance that with the areas you'd be looking at. Just as an example, a new house 15 minutes further from work might end up feeling really tedious over time.
Obviously we can't help you with those things but do be sure to consider what's outside of the house itself.
posted by 6550 at 8:50 AM on January 22, 2009
Balance that with the areas you'd be looking at. Just as an example, a new house 15 minutes further from work might end up feeling really tedious over time.
Obviously we can't help you with those things but do be sure to consider what's outside of the house itself.
posted by 6550 at 8:50 AM on January 22, 2009
Best answer: New furniture doesn't count as "renovations," especially if the new house were to also require replacement furniture (more bedrooms, different style, old furniture looks shabby in fancy new house, etc).
That is, I think you are stacking the deck here to produce the answer you are looking for, either by minimizing the cost of selling and buying new, or by inflating the cost of renovations. Step back, produce some realistic figures for both options, and make a decision that is informed by those figures.
Also, renovations can be as cheap or as expensive as you wish. I was flirting with the idea of having an addition built the other year, and the entire cost to add 25% more square footage to the house would have been well under what friends of mine paid at the same time to have their kitchen spiffied up (counters, cupboards, appliances, flooring, but no structural changes) -- if you don't need the fanciest of materials, and are willing to do some work yourself, these projects don't need to break the bank. And conversely, it is extraordinarily easy to turn a simple project into what Kensational calls a "garage mahal."
Paint is cheap, and even if you pay someone to do it, it still isn't that expensive. Refinishing flooring can be a DIY project, and putting in new flooring can be even easier than refinishing flooring in my experience; retail prices for flooring are really high, but if you are patient and keep an eye on your local Habitat or other building materials salvage place, you can buy it for pennies on the dollar. Insulation is cheap, and in many places you can get incentives for winterization (tax credits, or cash from your utility or city) that make it even cheaper. A basic deck requires lumber and a few weekends, but no specialized skills or tools.
Even excavation work can be surprisingly cheap, if you can find a good excavation company that works fast and clean. They need to keep their crews working, so smaller jobs (like filling and leveling your backyard, perhaps adding a french drain or other drainage options) serve to fill the gaps they have between larger, more profitable jobs.
On the other hand, if you bring in a high-dollar general contractor and ask to have all these little projects taken care of and finished to a high-end spec, you could turn this into some serious money.
posted by Forktine at 8:53 AM on January 22, 2009
That is, I think you are stacking the deck here to produce the answer you are looking for, either by minimizing the cost of selling and buying new, or by inflating the cost of renovations. Step back, produce some realistic figures for both options, and make a decision that is informed by those figures.
Also, renovations can be as cheap or as expensive as you wish. I was flirting with the idea of having an addition built the other year, and the entire cost to add 25% more square footage to the house would have been well under what friends of mine paid at the same time to have their kitchen spiffied up (counters, cupboards, appliances, flooring, but no structural changes) -- if you don't need the fanciest of materials, and are willing to do some work yourself, these projects don't need to break the bank. And conversely, it is extraordinarily easy to turn a simple project into what Kensational calls a "garage mahal."
Paint is cheap, and even if you pay someone to do it, it still isn't that expensive. Refinishing flooring can be a DIY project, and putting in new flooring can be even easier than refinishing flooring in my experience; retail prices for flooring are really high, but if you are patient and keep an eye on your local Habitat or other building materials salvage place, you can buy it for pennies on the dollar. Insulation is cheap, and in many places you can get incentives for winterization (tax credits, or cash from your utility or city) that make it even cheaper. A basic deck requires lumber and a few weekends, but no specialized skills or tools.
Even excavation work can be surprisingly cheap, if you can find a good excavation company that works fast and clean. They need to keep their crews working, so smaller jobs (like filling and leveling your backyard, perhaps adding a french drain or other drainage options) serve to fill the gaps they have between larger, more profitable jobs.
On the other hand, if you bring in a high-dollar general contractor and ask to have all these little projects taken care of and finished to a high-end spec, you could turn this into some serious money.
posted by Forktine at 8:53 AM on January 22, 2009
Best answer: Don't focus on the cost of the downpayment: What matters is how much money you spend in total. You need to figure out if the cost of a new house (plus real estate transaction fees to sell and buy) is greater than the market value of your current home plus renovation costs. Of course, this assumes that both the new house and the renovated house would have the same value, but close is going to be good enough in this case. A focus on the downpayment cost of a house, instead of the total cost, is arguably part of the reason that the US housing market is so bad right now. Don't fall into that trap.
That said:
renovations that would happen even if we sold the house tomorrow: painting pretty much everything including cabinets, replacing the deck.
This doesn't enter into your calculations, as you'll be paying for it either way.
renovations that would have to happen to make the next 3 years happy: all the above, plus fixing the flood problem in the yard, upgrading our furniture
Furniture doesn't enter into the calculations, as you'd presumably take it with you when you move. You need an estimate for the flood problem. The range of possible costs is very large.
if we stay for 10 years, we'd have to do all the above plus: refinishing or replacing about 700 sq feet of floor, insulating our garage and laundry room and installing a half-bath (we only have 1 bathroom).
Get estimates for these, but none of them are likely to be prohibitively expensive (insulation is cheap, but can be a bit pricey once you redo the drywall, refinishing flooring is relatively cheap, and a half-bath is probably not too bad if you keep it simple and don't have to get fancy with the plumbing).
I suspect that fixing your current house will be cheaper than buying a new one, especially when you consider real estate transaction costs, which are likely to be in the same rough cost range as your 10-year renovations (unless you go the FSBO route). The big variable is the flood problem, so that's your first step: find out how much that will cost you.
posted by ssg at 9:19 AM on January 22, 2009
That said:
renovations that would happen even if we sold the house tomorrow: painting pretty much everything including cabinets, replacing the deck.
This doesn't enter into your calculations, as you'll be paying for it either way.
renovations that would have to happen to make the next 3 years happy: all the above, plus fixing the flood problem in the yard, upgrading our furniture
Furniture doesn't enter into the calculations, as you'd presumably take it with you when you move. You need an estimate for the flood problem. The range of possible costs is very large.
if we stay for 10 years, we'd have to do all the above plus: refinishing or replacing about 700 sq feet of floor, insulating our garage and laundry room and installing a half-bath (we only have 1 bathroom).
Get estimates for these, but none of them are likely to be prohibitively expensive (insulation is cheap, but can be a bit pricey once you redo the drywall, refinishing flooring is relatively cheap, and a half-bath is probably not too bad if you keep it simple and don't have to get fancy with the plumbing).
I suspect that fixing your current house will be cheaper than buying a new one, especially when you consider real estate transaction costs, which are likely to be in the same rough cost range as your 10-year renovations (unless you go the FSBO route). The big variable is the flood problem, so that's your first step: find out how much that will cost you.
posted by ssg at 9:19 AM on January 22, 2009
Best answer: The house has a current value, possibly lower than you think. Price out the cost of selling. Price out the renovations. Then look at some real estate for sale. For $(sale value of house - cost of updates - cost of moving), what other house could you buy or build?
Do you like the neighborhood? Do you plan to have kids & is the school okay? Go to some open houses just to get an idea of what's out there.
posted by theora55 at 9:21 AM on January 22, 2009
Do you like the neighborhood? Do you plan to have kids & is the school okay? Go to some open houses just to get an idea of what's out there.
posted by theora55 at 9:21 AM on January 22, 2009
In this economy, which was is the transition in "transitional neighborhood" going?
Generally, I'd say renovate and enjoy. If you move to a new house, you'll want to do some renovating there unless by minor miracle someone is selling your perfect house in your price range. However, if your neighborhood is deteriorating, then selling is a more realistic option.
posted by 26.2 at 9:22 AM on January 22, 2009
Generally, I'd say renovate and enjoy. If you move to a new house, you'll want to do some renovating there unless by minor miracle someone is selling your perfect house in your price range. However, if your neighborhood is deteriorating, then selling is a more realistic option.
posted by 26.2 at 9:22 AM on January 22, 2009
If money and size are a wash, the only things on the line here are your feelings. I always find renovating pretty rewarding and moving pretty depressing.
Also, how do you feel about your current neighbors? New neighbors can be difficult.
posted by originalname37 at 9:47 AM on January 22, 2009
Also, how do you feel about your current neighbors? New neighbors can be difficult.
posted by originalname37 at 9:47 AM on January 22, 2009
turning the garage into another room
About that: Personally, I've never seen that done well. It never looks right (I'm really trying to avoid saying it looks tacky, but failing). It will almost certainly reduce the number of potential buyers when you do sell.
Another option is to build upwards, perhaps adding a room above the garage or converting attic space.
If your house is so small to the point that going out to the garage for living space is a serious consideration, you might be happier just moving to a bigger house.
posted by sageleaf at 11:54 AM on January 22, 2009 [1 favorite]
About that: Personally, I've never seen that done well. It never looks right (I'm really trying to avoid saying it looks tacky, but failing). It will almost certainly reduce the number of potential buyers when you do sell.
Another option is to build upwards, perhaps adding a room above the garage or converting attic space.
If your house is so small to the point that going out to the garage for living space is a serious consideration, you might be happier just moving to a bigger house.
posted by sageleaf at 11:54 AM on January 22, 2009 [1 favorite]
Are you really on a flood plain or just a flood fringe? There's a huge difference. For the former you probably have to consider raising your house if you make any substantial renovations, and may even be prevented from making any beyond a certain amount. By law existing structures are grandfathered in but policy is to encourage demolition and removal from flood plains. Flood fringes, on the other hand, allow for adaptable building.
I would make very sure of this before you even consider the economics of this project. Contact your local building authority for guidance.
If it's just a wet backyard, you can perhaps improve drainage with ditches and swales, or even add a dry well.
posted by dhartung at 4:17 PM on January 22, 2009
I would make very sure of this before you even consider the economics of this project. Contact your local building authority for guidance.
If it's just a wet backyard, you can perhaps improve drainage with ditches and swales, or even add a dry well.
posted by dhartung at 4:17 PM on January 22, 2009
What dhartung says. If you're in an actual flood plain, sell to the nearest sucker who will buy and move to higher ground. The planet? Not getting any drier.
If you've just got a backyard that floods a lot, then I have to say that there's a lot of fun and satisfaction to renovating. Our house is small but I love it because it's exactly what I wanted. I know, because I drew it this way.
posted by DarlingBri at 6:11 PM on January 22, 2009
If you've just got a backyard that floods a lot, then I have to say that there's a lot of fun and satisfaction to renovating. Our house is small but I love it because it's exactly what I wanted. I know, because I drew it this way.
posted by DarlingBri at 6:11 PM on January 22, 2009
« Older Una Americanca si un Roman din Washington DC | Looking for wiki-type software that does the heavy... Newer »
This thread is closed to new comments.
When we sold our house last summer, we ended up doing all kinds of repairs to get it up to snuff. We spent a lot of time with paintbrush in hand wishing that we would be able to enjoy the fruits of that labor. So do it now, enjoy it, and save yourself the frustration of trying to sell in this market.
posted by Shohn at 6:09 AM on January 22, 2009