Do you buy a fixer upper or a new construction home? In today’s video lets discuss the pros and cons of both to see what I would choose and help you to make an informed decision.
To Watch The Video Instead of Read Click Here: https://youtu.be/1M7p_SvutU0
First, a disclaimer, I love new construction. Every time I help a client buy, build, and design one I fall in love with it. I claim a large bias, however, as I currently live in a home that is almost 100 years old.
Pros Of New Construction:
- Customization You get to customize the homes before construction is complete. You can pick paint color, backsplash, tile, and floors and personalize it to be your own unique home.
- New Materials All of the materials are new. No hidden unknowns behind the walls. You’ll have new pex plumbing, new LED lights and fixtures.
- First Owners. You’ll be the first owner so you don’t worry about past problems such as smoke, pet dander, or dirty carpets.
- New Community. Since everyone in the community is a new home buyer you are part of a growing community. Everyone is new and in need of meeting a few friendly neighbors.
Cons Of New Construction
- Customization. While you get to pick some stuff out you cant get anything under the sun. Expect options but a limited amount.
- Upgrades. They aint cheap! The model home you’ve toured typically has the top of the line upgrades because they are trying to sell you on the home. But when it comes your turn to start picking options you will see the final cost number start increasing fast!
- Building takes time. In Utah it is usually 9 months. But also in Utah they have clauses in there for weather or other excuses. So be ready.
- Inflating costs. In 2021 we saw a few buidlers actually go back to the buyers and increase the agreed upon sales price because they saw cost increases. This blew my mind. If you go new build make sure this is NOT permitted in the contract.
Pros Of Remodeling Your Existing Home
- Costs. One HUGE advantage of a project home is you can buy into an area or home that you might not otherwise be able to afford. It give you the chance to own it and do repairs over time assuming it is habitable while they’re being completed.
- Property taxes. These will likely be less because you bought a good deal of a house that needs work.
- Sweat Equity. Since you are the one that is adding all of the future value via remodels and updates you are adding value and equity to your home through your labors aka putting in sweat equity. Even if you just act as your own general contractor and bring subcontractors in you will save money verses hiring someone to do everything. Of course, this is dependent on your skill and knowledge level. Often, you get what you pay for.
Cons Of Remodeling
- Time. Time is money and a lot of time will likely go into fixing up your new home. You might also need to deal with delays unless you have a good line of sub contractors and plan well in advance with ordering materials and scheduling/managing the work flow.
- Remodeling costs. Going over budget is common so usually you’ll need to factor in at least 10% over your budget. You’ll also need to be careful to not overspend or over remodel a home for the neighborhood or street you live on. It is easy to put to nice of items in a home but be wary of being the nicest house on the block. If you plan to be there forever it might make sense but be councious of what you are adding and how much it adds up to.
- Surprises. No matter the remodel there are always surprises. If you tear down a wall you find some plumbing or electrical that now needs to be moved. This adds more time and more money. Again, refer to #2 and plan for the unexpected.