Build, Prefab or Reno??

Question

Hi guys we are looking at buying a property with an older house on it, that is too small to have a small family in. Right now it is just us, but in the future we want kids.

We have about 60k to spend, but ideally we would be spending closer to 40k.

Generally speaking of course, what is the most economic solution? Our thought is to either live in the small house while another is being built OR until our prefab is ready, or to renovate the older home and add about 300-400 square feet onto it. My fiance has worked in construction, and is very good with do it yourself stuff, so I think we could definitely save some money doing basic things concerning the reno. I'm assuming the reno would be cheap, but as I'm new to this, no idea what we could safely budget. We would NOT be moving any plumbing, if we add on and redo the kitchen it will be to extend counter space.

Thanks a bunch for any advice.

Thanks guys. The house will be on agricultural property, out of the city. It is in an area we've wanted to move to, with little risk of subdivisons coming up thank GOD!!!

The house is in liveable condition, a lot of the stuff my fiance can do right now but to really make it comfortable for us we would have to add footage especially to the living room and kitchen area. Maybe even an extra bedroom off the first floor?

A big plus for getting another house on the lot was to use this one as a guest house, but we can always find a trailer home if we decide we would like another home on the property later on.

oh and our relationship is very strong! We have been doing lots to this house, painting, sanding, and will be taking on redoing the kitchen here before we sell! We both work day shifts, the beauty of doing renos on this place is we WOULD have time to take it slow and do it at our own pace as we are not planning on having kids for another two years.

Answer 1

I think the answer is outside your house. My hubby is trained in real estate appraisal......tho it's not exactly what he does for a living.....anyway the key three words in real estate value are: Location, location, location.

Is your home in a safe neighborhood that is not sliding downhill..figuratively of course. If your neighborhood is stable and real estate is selling, people are happy, the schools are acceptable to excellent, you are convenient to shopping, work, etc then staying may be a good option.

Are others staying and remodeling? Good sign.

If you went with a new house, prefab, would it be in a convenient neighborhood to work, school, shopping? Would be you early in the subdivision development or later? First in don't realize the increase in property values until the subdivision is no longer building new homes. With a new home there are extras: landscaping is often a biggie.

If you are planning on adding 400 square feet, that works out to about $40,000 normally except you will save since fiance can do the work......is he willing?? .....does he have time?? Home projects are always slow because they are considered "after hours" work when one isn't dead tired from the other "9 to 5."

You refer to him as fiance.....how committed is the relationship? I'm not being personal.....it is just home remodeling puts a strain on relationships.

Staying while another is built will put you in danger as you might end up with double mortgages until the old house is sold.....hopefully for what you need for the new house. Also to get the tax credit you need to live in your house for several years........3 I think. You'd have to ask a CPA about that.

Decisions, decisions, better you than me.

Answer 2

For Renovations........The Best Advice I can give is to make room in your Budget to develop a good set of plans. A good set of plans from a Designer, an Architect or a Builder WILL save you $$$$$ !!!
The plans will give all the trades the instructions they will need to properly budget and preform the work. It will also eliminate some of the costly change orders from the contractors.

If you build on your property with new construction or pre-fab. you will have a great existing rental or guest house.

Also remember, things happen and it always costs more than you think. All those trips to the hardware store add up fast.
Good Luck

Answer 3

Renovation done by your self is always cheapest.The draw back is it takes all of your time and it is slow. You will live in a construction mess for a time but if you help it will go faster. I have bought 3 houses and have renovated them totally by myself. The last one was a total redo.I mean total there is no existing part of the old house and I did it all by myself.Plumbing ,electric, rough and finish carpentry I did it all. The house went form $65,000 to $250.000 with 43 years and apx $60,000 in materials. I have a wonderful home now and it is paid for. YOU CAN DO IT.