Full gut renovation or buy new

[Anonymous]

Anonymous wrote:I have an old large house, and the thing is, the $200k is just a start, assuming it even covers the projects you describe. You will have ongoing, very expensive maintenance—that is the nature of these big 100 year old houses. They are only getting older. If you don’t enjoy it as a labor of love, it’s not worth it.

So best way is to know construction if you want to buy low and sell high and save on those expensive costs.

My neighbor is redoing his entire house by himself. He's from a third world country. He said that he didn't realize how much more it would cost to finish and he underestimated it.

[Anonymous]

You say you don't want to move and take on a mortgage (presumably to stay in the same area?), but this reno is going to be more than $200k. Get an architect and a more realistic estimate of cost. If reno + sale price of your house + renting somewhere else for a year is less than the price of a nearby house, do the reno.

I also don't see why you're worried about a mortgage. You're going to have a decent down payment since you own your home outright. Did you retire young or something?

[Anonymous]

Anonymous wrote:Sounds like Philly. We put $200k+ into a house in Philly and while it sounds like a lot, we still have next to no closet space, some failing plaster, a small amount of knob and tube, a bathroom that still needs updating, and omg the amount we pay in property insurance for these 100 yo stone houses. Literally several times what people pay elsewhere, although it sounds like you’re south Philly and maybe not in the stone houses in the northwest part of the city. But I guess there’s something to the old houses and there’s no substitute for family if they’re nearby. I’m not from here but kind of like the gritty nature of this place. And it’s wild to have so much space inside a big city.

I honestly don’t know what I would do in your case but if you’re budgeting $200k, plan to spend $350k. And that amount sounds like way more than $200k to me as an estimate.

I did think Philadelphia and the stone houses in the NW. Not sure where in South Philadelphia this would be?

200k can cover a lot if doing the critical improvements. Can upgrade bathrooms over time, not all at once. I'd probably stay but be realistic about what can be done. Seems like a complete overhaul would be closer to 400-500k. A nice kitchen remodel is going to be 100k at a minimum, 20k min per bathroom and then the rest. But maybe DC standards are higher.

[Anonymous]

If you can afford the renovation, stay. And ideally, do it all at once while living with family across the street.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I wouldn't give up the support - I'd do the reno (and did, 15 years ago, and still have no regrets).

I don't know where you are, but in DC, your all in reno would be significantly more than $200,000. Start with an architect, and have them bid out the plans. Then you'll know where you stand, and if you can do it all at once, or piecemeal.

That’s great advice, thank you. I had not considered an architect. We’ve gotten quotes on separate projects, $200k is the higher end all end. We’re planning 30% contingency, so $300k total budget, this would be our forever home.

I would stay and start with an architect too. This is a dream set-up and you have the chance to create an amazing home.

When we did it, there was a brief period of time that made sense to just move out, but our architect also sequenced the work to make liveable areas within the house during the reno. The size of your house makes that likely possible. The one thing though is that with a 100 year old house you do have the potential that they uncover something that really changes the scope of work. Grill your architect/structural engineer on that and when you would know and what is the worst case scenario.

[Anonymous]

I would choose a nicely renovated 100 year old house with 10 foot ceilings near family over some generic new construction (assuming you’re not planning a custom-build?) in a totally new city far from family.

Being near family alone is invaluable. But also the house/location you describe sounds so much nicer than most of the new construction in this country. It will be way more than 200k though. We spent nearly 300k for a small addition, 3 new baths, kitchen, and siding alone. That was 2 years ago. Prices only going up since then.

But if your mortgage is almost paid off and you can afford it, do it.

[Anonymous]

THis sounds like a no brainer to me.

Agree with everyone else - get an architect, budget lots of money, move out for a year and then you will have a great house in a great location across from the grandparents.

[Anonymous]

Three most important words in real estate - location, location, location

[Anonymous]

Anonymous wrote:I would choose a nicely renovated 100 year old house with 10 foot ceilings near family over some generic new construction (assuming you’re not planning a custom-build?) in a totally new city far from family.

Being near family alone is invaluable. But also the house/location you describe sounds so much nicer than most of the new construction in this country. It will be way more than 200k though. We spent nearly 300k for a small addition, 3 new baths, kitchen, and siding alone. That was 2 years ago. Prices only going up since then.

But if your mortgage is almost paid off and you can afford it, do it.

Need to keep in mind risk of overimproving for the market. There are neighborhoods in Philadelphia with lovely houses needing major upgrades but spending 300k in renovations will not get you an extra 300k in appreciation.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I would choose a nicely renovated 100 year old house with 10 foot ceilings near family over some generic new construction (assuming you’re not planning a custom-build?) in a totally new city far from family.

Being near family alone is invaluable. But also the house/location you describe sounds so much nicer than most of the new construction in this country. It will be way more than 200k though. We spent nearly 300k for a small addition, 3 new baths, kitchen, and siding alone. That was 2 years ago. Prices only going up since then.

But if your mortgage is almost paid off and you can afford it, do it.

Need to keep in mind risk of overimproving for the market. There are neighborhoods in Philadelphia with lovely houses needing major upgrades but spending 300k in renovations will not get you an extra 300k in appreciation.

Yeah, this is a good point. I’m thinking of a neighborhood like overbrook with a surplus of huge houses, poor schools, and low/no appreciation. So the question is, would you want to sink that much $ and hassle into a house purely for your own enjoyment. For how long will the grandparents live across the street? In ten years, if they are no longer there, would you want to stay?

[Anonymous]

Anonymous wrote:Three most important words in real estate - location, location, location

Op says neighborhood is “not great, but gentrifying.” Nearby grandparents are great but that can change too.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Sounds like Philly. We put $200k+ into a house in Philly and while it sounds like a lot, we still have next to no closet space, some failing plaster, a small amount of knob and tube, a bathroom that still needs updating, and omg the amount we pay in property insurance for these 100 yo stone houses. Literally several times what people pay elsewhere, although it sounds like you’re south Philly and maybe not in the stone houses in the northwest part of the city. But I guess there’s something to the old houses and there’s no substitute for family if they’re nearby. I’m not from here but kind of like the gritty nature of this place. And it’s wild to have so much space inside a big city.

I honestly don’t know what I would do in your case but if you’re budgeting $200k, plan to spend $350k. And that amount sounds like way more than $200k to me as an estimate.

I did think Philadelphia and the stone houses in the NW. Not sure where in South Philadelphia this would be?

200k can cover a lot if doing the critical improvements. Can upgrade bathrooms over time, not all at once. I'd probably stay but be realistic about what can be done. Seems like a complete overhaul would be closer to 400-500k. A nice kitchen remodel is going to be 100k at a minimum, 20k min per bathroom and then the rest. But maybe DC standards are higher.

I’m the Philly pp you’re quoting and I initially thought the stone houses in NW as well but the new community center makes me think south Philly. That’s the only new community center I’m aware of. I think the concern about over improving is important - esp in that area - but if it’s truly a forever home that’s less of a concern. But the budget will have to be way higher.

[Anonymous]

I think this is South Philly / Grays Ferry based on the $20m rec center. I don’t know enough about the neighborhood to know if there is really upside—not great seems accurate to me. I know a young couple who bought a place there and are renovating but they are arty twenty something’s with no kids.

[Anonymous]

Anonymous wrote:I think this is South Philly / Grays Ferry based on the $20m rec center. I don’t know enough about the neighborhood to know if there is really upside—not great seems accurate to me. I know a young couple who bought a place there and are renovating but they are arty twenty something’s with no kids.

Philly seems to be gentrifying at the pace of Brooklyn so it could pay off. I'd take the risk and invest in the reno because OP says this is a forever home if they are okay with private schools if needed when the time comes.

[Anonymous]

Anonymous wrote:I think this is South Philly / Grays Ferry based on the $20m rec center. I don’t know enough about the neighborhood to know if there is really upside—not great seems accurate to me. I know a young couple who bought a place there and are renovating but they are arty twenty something’s with no kids.

"On a half acre inside a major city, neighborhood is not great, but gentrifying."

Half acre is the tricky part. South Philadelphia is all rowhouses. Half acre sounds like Mount Airy, Germantown. Parts of Mount Airy is nice, parts of it is still stuck in potential gentrification but never making it for the last 40 years. Could be Germantown as there's pockets of large lots around the Awbury arboretum.

I can see pouring money into a Mount Airy house as that's the best bet for a long term gentrification. Philadelphia gentrification is always going to be hit or miss. It's not Brooklyn. There's a massive crime and worsening problem. Schools are always problematic.