What would you do? Buy new house or renovate existing house?

[Anonymous]

Anonymous wrote:Low mortgage and neighborhood you love? I’d stay and renovate.

How about just renovate the basement and add the bathroom before considering an addition? Agree with PPs that it’s going to cost a lot more than you think.

Just the basement renovation and adding a bath (full bath with all the plumbing costs I would imagine) can easily run $75-100k

[Anonymous]

Anonymous wrote:We love our neighbors and neighborhood. We have been in the same house for 10 years and have out grown our house. We have 3 young kids in 2600 sq ft 4 bedroom 2.5 bath with 2 WFH parents.

Would you do a major $200K renovation on house or sell and buy a larger house?

A new house recently came up on the market that is 4200 sq ft 4 bedroom 4 bath for $1 million.

We could probably get $950,000 for our existing house (bought it for $700,000) and have about $450,000 on the mortgage plus a $100,000 HELOC to pay off.

We have a very low interest rate which makes me nervous to even look at a new house. But we really need more space. What would you do?

This makes zero sense. No way there’s a 50k difference between a 2600sf house and a 60% larger, 4200sf house in the same neighborhood. The 1 mil house is underpriced and will bid up by several hundred thousand OR you’re vastly overestimating how much you’ll get for your home.

[Anonymous]

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Anonymous wrote:2600 sq ft is a lot of space. Is it a layout issue?

OP here - no the layout is pretty good. We just have a lot of people in the house and need more space. DH and I both work from home and need dedicated office space (apart from each other) and our kids are close in age so will be getting larger and taking up more space. 3 kids who are under 5 years apart, so they will all be teenagers in the house together.

OP - I agree with you that for your needs 2600 sq ft with 4 bedrooms is not enough space. You may have bedroom space that you could make work (for a while until they are teens), but finding the office space that makes you productive is a different ballgame. We have house needs similar to yours, with similar house size (actually 5 bedrooms) and family size and we need to renovate for office space. 200K won't get you what you want, so perhaps you focus on what you need to do to get comfortable a WFH space. It may make the other challenges of the house easier to deal with if you feel content with your workspace.

PP again - I finished reading through your other responses and see your comment about people visiting often. This is our situation as well and my office is also the guest room. Don't discount how disruptive it is to have guests in your office, which is supposed to be your full-time WFH office. Could you figure out how to solve the WFH situation as I mentioned above and rearrange the kids in the bedrooms where one of the kids' bedrooms is also the guest room and the kid is displaced when guests are there? If the kids need separate rooms as you mention.

OP here - yes that is our plan in our current home. Put oldest kid in the largest room with a queen bed and then displace kid when guest visit. BUT that means I am relegated to a random corner on a small desk on the main floor for my work station until we finish the basement.

Would a co-working space be practical while you renovated?

[Anonymous]

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Anonymous wrote:What do you plan to do in the renovation? I don't think you could turn your house into something like the 4200 SF 4BR/4BA for 200K. Adding 1400 SF plus 1.5 BA and renovating everything else is going to be more than that (double, probably).

If the other house is in your neighborhood, I'd seriously entertain it. You don't want to manage a major renovation with three young children and two full-time jobs. At some point, isn't it worth something to just have the space you need and be able to focus on your family?

Op - we would finish the basement to add a bathroom and rec room and then probably blow out the back of the house to make a large family room and expand the kitchen. But yea it would be expensive and horrible to live through.

I am just nervous about a) a new mortgage with a high interest rate, b) leaving our neighbors who would still be close by but not next door and we are very close to them and c) trying to sell our existing house.

If you're in the DC area, you're not going to be able to finish a basement, add a bathroom, build an addition, and expand your kitchen for anything close to $200k.

So not true. I’ve flipped enough houses in DC to know that most homeowners over pay for renovations.

[Anonymous]

Anonymous wrote:Sell!! You cant do much for $200k.

OP, if you have the time and patience, be your own PM and the $200k can give you more.

[Anonymous]

-Reduce the stuff you have. Declutter. Look at Apartment Therapy and other areas for inspiration.
-Think of creative ways to have multipurpose spaces.
-You or your husband can get a we work space or similar arrangement.

How old are your kids and how much longer will they be at home? How close are you to retirement? College funds, driving, all those considerations already accounted for? I think there have been some good concerns raised about the finances already of selling & moving vs renovating. There’s also a lot of expenses with moving and buying furniture, etc. so I’d consider all of that too.

I get it. We live in a 2700 sq foot place with a large dog but only 2 kids. We love our community.

[Anonymous]

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Anonymous wrote:What do you plan to do in the renovation? I don't think you could turn your house into something like the 4200 SF 4BR/4BA for 200K. Adding 1400 SF plus 1.5 BA and renovating everything else is going to be more than that (double, probably).

If the other house is in your neighborhood, I'd seriously entertain it. You don't want to manage a major renovation with three young children and two full-time jobs. At some point, isn't it worth something to just have the space you need and be able to focus on your family?

Op - we would finish the basement to add a bathroom and rec room and then probably blow out the back of the house to make a large family room and expand the kitchen. But yea it would be expensive and horrible to live through.

I am just nervous about a) a new mortgage with a high interest rate, b) leaving our neighbors who would still be close by but not next door and we are very close to them and c) trying to sell our existing house.

If you're in the DC area, you're not going to be able to finish a basement, add a bathroom, build an addition, and expand your kitchen for anything close to $200k.

So not true. I’ve flipped enough houses in DC to know that most homeowners over pay for renovations.

Lol. Show your numbers if you think anyone inside the beltway could do an addition, kitchen, bathroom, and finish a basement for $200k.

[Anonymous]

I’m amazed that you were able to do roof, bathrooms, office, windows and roof for 100 K. Do you live in the mid west or somewhere where labor costs are much lower? My SIL just did windows in her similarly sized house and they were $125 K.

If labor really is that cheap where you are you might get your renovations for 200 K but you need to price it out. Material costs for lumber are still high. If you blow out the back to expand the kitchen you are dealing with foundation, structural engineering and framing, electrical, plumbing, mechanical, roofing etc. When you knock out a load bearing exterior wall with electrical, plumbing and HVAC you are basically bring in all the various trades so it gets much pricier than tiling a bathroom and installing a new vanity.

Things to consider since a large new build is only 50K more. Have you looked at the comps to be sure you could sell at 950? In areas where there is lots of land around established neighborhoods with older homes don’t appreciate because people can get more bang for their buck buying the new build. You don’t want to over improve your home because your ROI for improvements will vanish.

For the interest rate change, as long as you are under the debt to income level and can handle the larger payment, I wouldn’t worry about this as much as whether I could really sell my house for 950K and get the new one for 1 M.

[Anonymous]

Anonymous wrote:

Anonymous wrote:OP, I’m puzzled - how can a substantially larger home in the same neighborhood cost only marginally more than your current home (1 million vs 950k)? If that’s true, then you should move. Otherwise it might be that the larger home is in poorer condition that you need to renovate anyway. Then you should stay and renovate over time.

Op here - I am not sure either. I think the other house is under priced.

Redfin estimated our current house at $960,000. So I think we could get close to that. We have done a lot of upgrades to the house. We just need more square footage.

It's probably priced low to generate interest and will go for well over $1 Million. That's how this market is working.