Why should I buy a new, never-lived-in-before, home versus buying or keeping an older home and remodeling? This is a question we often hear when homebuyers begin their search for a new home. It’s usually about the time they hear about the cost or how long it might take to have their new home built that they start asking themselves these types of questions.
The numbers over the years indicate that remodeling a home – while it may increase your enjoyment of your home – is usually not a great financial investment. Most individual items, according to Remodeling Magazine in its article titled‚ Cost Vs. Value Report 2013‚ have a resale value of from 50 to 65% of the cost of the job. In other words, your remodeling expenses should not be considered an investment in your home. They might increase function, livability, and even help you sell your home, but they will not usually bring you a positive return on the actual expense.
Now if you happen to find an incredible buy on an older home, and even after you plan on spending a substantial sum remodeling it – perhaps even half as much as your purchase price – and your total cost is still under market value, then by all means, go for it. But of course, even then, the home should meet all your needs as to location, size, etc.
Or you might decide to remodel for sentimental or personal reasons such as keeping a home in the family. But if you’re looking to purchase a home based on a certain location – maybe you’ve been transferred with your job or you’re retiring – then a new home is usually a better financial decision. A new house is a better investment for many reasons.
A new home is more energy efficient (saving money on utility bills) due to new construction codes for buildings, for appliances, and for heating and cooling units. You have fewer repairs and less maintenance, thus fewer headaches and worries. Plus you get a new home warranty, appliance and HVAC warranties, and better fire safety features.
Lastly, there are more financing options for new homes and the possibility of customizing the home and décor just the way you want it before you even move in! And you can still remodel your home for enjoyment as opposed to how you think someone else might like it. Because it’s your home, your castle – it’s all yours!