Is It Worth Remodeling?

Index

  • When one installs a new window in a new construction then it is usually possible to control costs and save money. The rough opening for the window can be framed to measure. The window can often be ordered in advance and arrive at the construction site on time. The window can be installed after the the exterior sheathing and house-wrap have been installed but before the siding, drywall and trim.

    When installing a new window into an existing home none of the above benefits are likely. The same is usually true for most other building components. On a per unit basis,remodeling tends to cost more than new construction. How much more? In my opinion at least 1.5 times more and more likely twice as much or even more.

    None of this suggests that one should not remodel or that all remodels cost more than new construction. Quite the opposite, most remodels help save money, time and materials. But if most of a structure needs to be repaired or replaced then it may cost more to remodel then to build new.

  • I like to think about 3 levels of remodels:

    The Cosmetic Fixer - This is the house with "good bones" and some good systems but in need of a limited number of major deficits. For example: it has a good foundation and framing, the electrical system needs some minor repairs and a few upgrades, it needs new paint and carpet and new kitchen cabinets and a 2nd bathroom.

    In this case, the portions of the home that are in good condition still have a lot of value. Most areas might need some TLC and a select few need some significant upgrades.

    Bulldozer Fodder - Tha's the other extreme end of the scale. The poorly built home or the home that has been mismanaged and used as a rental for the last 30 years. In reviewing the inspection report on this home it is hard to find a single system that can be left "as is".

    It also lacks any "wonderful old charm". Whatever old trim might still exist has been damaged and painted over with many coats of paint. The electrical, plumbing, heating, roofing siding systems... are all in need of major rehabilitation or replacement.

    It was not George Washington's home and he didn't sleep there. Its existence does not provide for some special zoning benefits.

    It would be great if some of the material in the home could be salvaged. This might save some money and reduce global warming. But don't expect to make a lot of money on salvage.

    The demolition costs could be high if some of structure contains hazardous material such as asbestos, an underground oil tank...

    And then there are the ones in-between - and those are the projects that require a lot more analysis and planing and a lot of discipline - See A Building and Remodeling Checklist.

    The devil is in the details. And possible the easiest way to convert a $100K project into a $750K project is to make a whole bunch of "small" changes. The light fixture that was going to cost $75 and ended up costing $400 and similarly a few hundred other like decisions.

    The Bottom Line: Remodeling can save money if it is possible to save a significant portion of the existing structure. But if more than 1/2 of what is there now needs major rehabilitation or replacement then it might be less expensive to build new.

  • There are some situations when it makes sense to undertake the rehabilitating a seriously deteriorated structure. One example is in a situation when taking on such a major project is one of the only ways to enter the housing market.

    Here are some suggested guidelines:

    • Make sure that your have a good understanding of the scope of the work. Hire experts to help you evaluate the whole project and don't allow emotions to cloud your decisions.
    • Planing out the details for such a project is an essential step in the process. Such projects are complex and planing will save time and $$$. Because of inadequate evaluation and planing, too many projects of this type never get finished.
    • If you plan to "camp" in the home during any part of the construction, make sure that the house is safe. For example, make sure that the electrical and heating systems are safe.
    • These types of project tend to be time and energy consuming. If this is that type of project that you think will be personally rewarding then it might be a project for you. If not...
    • These types of projects require many skills. You may have some of these skills but will likely have to learn many others.
  • The cost of labor is one of the biggest cost components of construction. By doing some of the labor, it is possible to reduce the cost of a project. But do-it-yourself (DIY) construction comes with some challenges:

    • It's possible to "save" the contractor's fee. But these savings require that the DIY "general contractor" spend the time and have the skills to plan, organize and supervise the work. Good contractors work very hard to earn their fee, the DYI contractor will have to work even harder.
    • Good contractors and specialty contractors have the skills and tools to do work faster and better. DIY work requires some construction skills, a learning curve and more time.
    • General contractors have a stable of established and known sub-contractors. This saves them time and money and results in an established quality of work. The DIY general contractor will have to spend a disproportioned amount of time and effort to find good quality sub-contractors.
    • I have seen many books, material and services that promise large savings when undertaking DIY work. My experience suggests that some modest savings are possible with DIY work. I have also seen projects that ended up costing more than contracted work and some with very poor quality results.

    The best DIY projects are those done by people who enjoy this type of a project, are well organized and have some construction skills and are willing to learn others.