Q: How Do You Decide Whether to Add on to an Existing Home or Purchase a New One?
A: There are a few things to consider, including cost, individual needs, and what will add value down the road. Also important: your emotional attachment to the existing home.
As designer and builder Philip S. Wenz, the author of Adding to a House: Planning, Design & Construction, notes, an addition is much cheaper than building a new home and can offer a “new” home without the heartache of moving.
• Can you finance the home improvement with your own cash or will you need a loan?
• How much equity is in the property? A fair amount will make it that much easier to get a loan for home improvements.
• Is it feasible to expand the current space for an addition?
• What is permissible under local zoning and building laws? Despite your deep yearning for a new sunroom or garage, you will need to know if your town or city will allow such improvements.
• Are there affordable properties for sale that would satisfy your changing housing needs?
Explore your options. Make sure your decision is one you can live with – either under the same roof or under a different one.
Q: What Should I Consider When Redoing My Kitchen?
A: It is tempting to discard existing appliances when you build new cabinets around them. Rethink the idea. If the appliances are workable, keep them – and save yourself from $1,000 to $5,000, according to the National Association of the Remodeling Industry. Also keep the present location of major fixtures, appliances and utilities relative to the plumbing, gas and electrical outlets. Rearranging plumbing, wiring and jacks can be very expensive.
Refacing existing cabinets can reduce the cost of your kitchen remodel considerably and eliminate the need for new flooring, countertops and appliances. If you must get new cabinets, options such as spice racks and slide out wire baskets can be added later. Also, install cabinets without soffits to decrease labor cost; and avoid trim moldings, or use a simple trim. If you must have a new wood trim to match the new cabinets, order pre-finished trim to decrease labor cost; avoid having the painting or staining done on-site.
Other helpful tips: choose neutral colors for fixtures, appliances and laminates and avoid the need for a new floor by sanding and refinishing a hardwood floor that may be underneath the existing vinyl flooring.
With the stabilizing of the real estate market, more homeowners are spending money on remodeling projects. If they are not careful, homeowners can end up paying more than they ever expected. Duane Wilson, owner of Cornerstone Design & Remodel–a San Diego-based Kitchen & Bath Contractor–provides valuable tips on how to avoid 3 of the most common pitfalls.
A homeowner makes a large deposit, then gets no work done
This is one of the most common scams among unscrupulous contractors. They ask for a big deposit or to pay for all of the materials upfront, then the homeowner never hears from them again. To avoid this pitfall, homeowners should not pay for work or materials upfront and should avoid any large deposits.
In California, it is against the law for contractors to ask for more than 10 percent or $1000 (whichever is less) for a down payment. They cannot legally ask for upfront payment for materials or work. The one exception is if the contractor is ordering customer-requested custom materials. In that case, they can ask for payment upfront.
Suppliers or subcontractors come after the homeowner for payment
Homeowners are responsible for suppliers and subcontractors who do not get paid on their job. They can even put a lien against the home where they did the work. To avoid this pitfall, there are several strategies a homeowner can use: Pay the supplier or subcontractor directly
Issue joint checks to the contractor and supplier/subcontractor
Get an unconditional lien release from suppliers/subcontractors
Homeowner is liable for an injury on the job, including lost wages
If the general contractor does not have valid insurance, the homeowner is liable for any injuries on the job. This includes paying lost wages, if someone gets hurt and cannot work for a period of time. To avoid this pitfall, check that the general contractor has valid liability and workman’s comp insurance.
Of course, the easiest way to avoid these and other potential pitfalls is to work with a reputable contractor who has a history of paying suppliers and subcontractors on time. Happy remodeling!
In the age of HGTV, home and garden magazines, Pinterest, and more, the thought of remodeling your home might be tempting. After all, there’s a lot to love about redesigning, updating, and maximizing your space. Plus, whether you’re thinking of joining the do-it-yourself crowd or prefer to let hired professionals do the heavy lifting, any number of popular TV programs and encouraging articles make home remodeling look like a piece of cake. But before you start measuring walls and making demolition plans, Dan Fritschen, founder of www.remodelormove.com, encourages you to stop a moment and really consider what you’re about to jump into.
“Remodeling isn’t for everyone, and many times it could be a downright bad decision,” says Fritschen. “It’s well worth your time to pause and consider what your proposed project entails, and whether the commitment is worth the time, energy, and money you’ll end up pouring into it.”
So, how can improvement-oriented homeowners determine whether remodeling is a good idea or not?
Here, Fritschen shares seven of Remodel or Move’s important considerations that can indicate whether or not to remodel. So before you launch into your own project, ask yourself these questions:
Which are we more excited about: Hawaii or hardwood floors? Yes, that updated living room you bookmarked in a magazine looks fantastic. But in the grand scheme of things, how much joy will it bring you? For instance, would you be happier with a trip to (and later memories of) a pristine white sand beach or with brand-new flooring?
“It may sound elementary, but give some serious thought as to whether you’d rather spend your time and money on a vacation or on a new and improved living space,” Fritschen advises. “Even if you don’t end up booking your trip immediately, leaning toward ‘vacation’ over ‘remodel’ is a good barometer for determining how important an updated home actually is to you. And the truth is, unless a specific renovation really is your heart’s desire, you’d probably be better off traveling than pouring money into an already-functional room.”
Are we the Joneses? It’s a fact of life: Everybody wants to keep up with the Joneses. (In fact, Fritschen says, that’s a very popular reason for deciding to remodel!) Before you hit up the hardware store, though, take a moment to consider whether or not you are the Joneses. Is your home already one of the biggest or nicest in the neighborhood? If so, it’s likely that the addition or remodel you’re planning will end up being a lot of work that won’t significantly increase the value of your home.
“If you really want to remodel because you love the design and remodeling process, then go ahead,” urges Fritschen. “But if all you really want is a bigger or nicer home and you already have the biggest and nicest in the neighborhood, it may make more sense to move to a new home that has all the features you want in a neighborhood full of larger and nicer residences.”
Can we really afford this? Even on sticking-to-a-budget-themed renovation shows, the main emphasis is on the work being done and not on the financial decisions being made. So what many homeowners fail to fully understand is that remodeling usually costs a lot, even when you’re going the DIY route and looking for bargains.
“If you’re not exactly rolling in the dough, don’t write off your remodel entirely,” Fritschen advises. “There are smart, financially savvy ways to remodel, including using money from savings, using a 203k mortgage, or refinancing and getting cash back on your home. However, if the only ways you can pay for your remodel are to tap into retirement accounts or use your credit cards, then the cost of remodeling increases significantly and is then much harder to justify. If you can’t pay for a remodel the ‘smart’ way, then it is better to wait a few years and focus on saving up the money you’ll need.”
Is the finished product worth the stress and mess? Again, this is an area in which TV shows can be misleading. Think about it: All of the chaos, frustration, debris, and stress are compressed into a 30-minute or hour-long slot. (And magazine or internet articles might not address these factors at all!) In the real world, though, even the most mellow and easy-going people can find remodeling to be a difficult process.
“The decision-making, the expense, the mess, the interruption to routines…it all makes remodeling a potential nightmare,” points out Fritschen. “So carefully consider everyone’s response to the turmoil of remodeling. If you suspect that some in your household won’t be able to effectively deal with the stress, then deciding against remodeling—or putting it off—could be a better decision.”
Is our income secure? For obvious reasons, if you aren’t sure of your income stream, spending all of your savings on a remodel isn’t a smart choice—especially when the economy isn’t exactly stable and thriving.
“If you aren’t sure about your job or other source of income for the next few years and have just enough in savings to pay for the remodel, think about waiting,” says Fritschen. “For your peace of mind, and perhaps the outcome of the project, it’s worth waiting until you have saved more or are 100 percent confident that you will have a steady income in the future.”
How long will we be in this house? If there’s a chance you may be moving soon, Fritschen says there are two very good reasons not to remodel. First, remodeling is a lot of work. And secondly, in many cases, the cost of updating your home might exceed the amount your home appreciates after the work is finished.
“In each of these cases, the only way to justify a remodel is by quality of life improvement—but if you are moving a few months or even years after the remodel is done, then you might never be able to truly enjoy the updated home enough to justify the costs,” he shares.
Is this a good investment? As Fritschen has pointed out before, in many cases, the cost of a remodel might exceed your home’s overall increase in value once the project is complete.
“I want to stress that it’s very important to know going in that you might not make money, and to be okay with that,” he emphasizes. “Do your research before making any commitments so that you’ll have a fairly accurate idea of what to expect in terms of cost and your home’s updated value. If the numbers aren’t promising and the thought of not making a clear profit when you eventually sell your home horrifies you, you might want to rethink your renovations.”
“Always make sure you have an accurate perspective on when a remodel makes sense and when it doesn’t,” Fritschen concludes. “Remember, the project should improve not only your home, but also your happiness and quality of life—without breaking the bank or driving your family around the bend. Still not sure? take advantage of the free Should I Remodel? Online Calculator at http://www.remodelormove.com/should-you-remodel.”