Ask The Contractor: Building A New House Vs. Renovating An Old One (2024)

FAQs

Is it cheaper to build a new house or remodel an old one? ›

Q: Is it cheaper to renovate your house, buy a used one or build a new one? A: It's almost always less expensive to renovate an existing house than to buy used or build a new one. It's easiest to break the numbers down by square foot, keeping in mind that costs are highly variable based on location and market shifts.

In general, building up tends to be less costly than building out. When you factor in things like digging and pouring a new foundation, building out typically carries a higher price tag (though this isn't always true, and certainly depends on the size of the room and its purpose).

If you plan to be in the house for the long-term and then sell it, it is usually wiser to tear down and rebuild the house, at least from a purely financial perspective. Physical elements of a home are on a timer. The minute the hammer strikes your house for the last time, that timer starts ticking.

If you have noticed severe problems with your home's structure, or if you've noticed extensive moisture and mold damage in different areas, you might want to completely rebuild instead of simply renovating that portion. However, a home only needs a complete rebuild if it has extensive damage.

If you remodel, you don't have to move

Moving is expensive, period. You could be looking at paying realtor fees, hiring movers, renting a storage facility or renting short-term housing. And this doesn't include costs for any home improvements or repairs needed to get your house ready to sell.

It's easy to put a lot of money into an old house renovation; it's a lot harder to make all that money back during the sale. In fact, there's a good chance it won't happen. The average payback of a home remodel is between 56% and 76%. The exact amount depends on where you live and what kind of changes you make.

Major Overhaul – Six Months to Over One Year

Basically, if it is necessary to gut the whole home, it will take longer to put it back together. These types of construction projects often take six months to a year or more to finish.

Budgeting for Your $100,000 Renovation

With a $100,000 budget, you can accomplish a significant amount of renovation work, particularly if you prioritize your project goals and work closely with an experienced team like Multigroup Contracting.

What is the most expensive thing to fix in a house? ›

On a per-square-foot basis, pole barn houses and barndominiums are the most affordable at around $50 to $160 per square foot. Other inexpensive home types include modular homes, tiny homes, shipping container homes, and standard one-story ranch homes.

Older homes are also less energy efficient than newer homes. Many have outdated windows and insulation that could be in violation of today's building codes. But more importantly, they won't retain heat or cool air as well as their newer counterparts. But that's where renovation loans can help!

Is it cheaper to add on or move? If you love the location of your home, renovating it and adding on to it is almost always a better investment than buying a new home. In addition to the higher cost of a new home compared to the cost of a home addition, you'll also have to pay fees and cover moving expenses.

Overall, it's cheaper to build a home than to buy one in California, with 13 out of the 20 counties saving you money if you decide to build your house from scratch. Budget-wise, building is more favorable in Southern California whereas Central California caters best to those interested in buying.