Should we spend 500k on a renovation?

[Anonymous]

Why would you put in $500k to have your basis almost $1.4 for it to be worth $1.1-$1.2? That’s ridiculous. Just move.

[Anonymous]

Anonymous wrote:

Anonymous wrote:OP here- it would be a three story renovation. House is on a hill, so expanding/renovating the kitchen, adding room to the second floor above the kitchen, adding room to the basement, adding a deck, and expanding into our front portico.

It seemed absurd to me as well, so glad I’m not being cheap.

500k is not absurd in the DC area for this much work.

Of course it is, but there is the Bethesda premium for people who don’t know any better.

[Anonymous]

If it makes you feel better I live in SF now and the work OP is describing would cost well over $1M if it can even get approved. Our good friends spent $500K+ on a gut interior renovation of just the kitchen / first floor (no moving walls or expansion), albeit with professional designers and custom everything.

[Anonymous]

Anonymous wrote:You can build a new house for 500k

Sure, you can build a new house, but the relevant question is whether he can build a new house that would be equivalent to his renovated house for 500k. Unless these are really dumb Renos, then highly likely the answer is no.

[Anonymous]

We spent that much on a reno 10 years ago. In retrospect we probably should have moved. While we will make our money back, the market for renovated Colonials in our neighborhood is lower than the market for tear downs/new builds. So the prices of Colonials has stagnated some. It was worth it from a QOL perspective, and the reno has held up 10-11 years later, but for market reasons it wasn’t the best financial decision.

Our financial situation was stronger than yours at the time (higher income, higher savings, very high home equity we could tap into) so it was lower risk. In your situation I think $500k is a lot unless you have very high equity in your house.

[Anonymous]

Anonymous wrote:We spent that much on a reno 10 years ago. In retrospect we probably should have moved. While we will make our money back, the market for renovated Colonials in our neighborhood is lower than the market for tear downs/new builds. So the prices of Colonials has stagnated some. It was worth it from a QOL perspective, and the reno has held up 10-11 years later, but for market reasons it wasn’t the best financial decision.

Our financial situation was stronger than yours at the time (higher income, higher savings, very high home equity we could tap into) so it was lower risk. In your situation I think $500k is a lot unless you have very high equity in your house.

PS we are also in Bethesda and in the same price range. Our house today would sell for around $1.3m.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OP here- it would be a three story renovation. House is on a hill, so expanding/renovating the kitchen, adding room to the second floor above the kitchen, adding room to the basement, adding a deck, and expanding into our front portico.

It seemed absurd to me as well, so glad I’m not being cheap.

500k is not absurd in the DC area for this much work.

Of course it is, but there is the Bethesda premium for people who don’t know any better.

Ahh, the posters who know the mythical contractor who will build a three story addition for $50k. Post the names of contractors.

[Anonymous]

Does it include an addition? At the price point I wonder if you may be better off just rebuilding.

[Anonymous]

It sounds like it's not worth it and you should just move.

But also, why so little in college savings?

[Anonymous]

Where will you live while this is going on? The more you do the longer it will take. Once your kids are in middle school life changes. What are your plans for the giant house once kids are gone? Real estate folks are in business to tell you to get into space that is not sustainable. That’s how they get repeat customers. The stress of a major renovation has broken up more than a few marriages with young kids. In our Bethesda neighborhood the majority just buy a bigger house and sell the smaller one to a builder who replaces it with a 5 or 6 bedroom one.

[Anonymous]

OP here- our house is a relatively recent build (80’s) and more of a mid century style. So it’s got light and space (4 bedrooms upstairs, 2 bedrooms in the basement), 3.5 baths. So it’s fine, but the kitchen-dining-living area is from the 70’s and it would be pretty phenomenal if we would open it up and enlarge it with an addition and a deck. But probably not $500k more phenomenal.

[Anonymous]

No, you have saved no where near the money needed for college. Selfish to do a renovation.

[Anonymous]

Anonymous wrote:

Anonymous wrote:OP here- it would be a three story renovation. House is on a hill, so expanding/renovating the kitchen, adding room to the second floor above the kitchen, adding room to the basement, adding a deck, and expanding into our front portico.

It seemed absurd to me as well, so glad I’m not being cheap.

500k is not absurd in the DC area for this much work.

No it's insane for anywhere.

Bad financial decision.

[Anonymous]

Anonymous wrote:OP here- our house is a relatively recent build (80’s) and more of a mid century style. So it’s got light and space (4 bedrooms upstairs, 2 bedrooms in the basement), 3.5 baths. So it’s fine, but the kitchen-dining-living area is from the 70’s and it would be pretty phenomenal if we would open it up and enlarge it with an addition and a deck. But probably not $500k more phenomenal.

Rest of the neighborhood price point? 500k reno will price you out of your neighborhood what if you have to sell?

[Anonymous]

Anonymous wrote:

Anonymous wrote:You can build a new house for 500k

Not around the DMV. House prices are skyrocketing, you can’t get a close-in tear down for under 700k.

I’m going to go against the grain here and say do it. If you love your neighborhood, and you can’t easily move into something you like more, why not? You have 800k in “family savings?” Go ahead and spend a chunk and stay in the house for the next 20-30 years.

What is "family savings"?