Building New vs Large Scale Renovations

In the last couple of years the Lower Mainland has seen a substantial jump in real estate values that have significantly outpaced the costs of construction.

Homeowners often wonder if they should stay put and renovate or sell and build a new custom home. Which provides more value?

Let’s examine the building new vs renovating toss-up and the things that both processes have in common.

You Can’t Skip the Design and Planning Process!

building new vs renovatingWhether building or renovating, you can’t escape it. Following a proper process will gather all possible information about a property to help decision making. There are three phases:

  • Feasibility study. This includes concept creation and a review of zoning regulations.
  • Architectural development and permit documents.
  • Interior design and project specifications.

Regardless of your desire to renovate or to build new, the initial conceptual design process is smaller and simpler than you might think, but very important. It presents an opportunity for you to establish a working relationship with your design professional on a “see how it goes” basis. It also identifies the larger items in getting the project started, like budget, or if an extra floor is feasible, or considering an addition at the rear.

What Does Your New or Renovated Home Need?

List all the features that you need in your home. How many bedrooms and bathrooms? Need a suite? What about future family plans to factor in?  Also consider the “nice to haves” or “wants”. Both the needs and wants will help form the framework and constraints for the creative team. They will come up with three options for you to choose from (good, better, and best) and the costs.

There are two ways to come up with a budget for design.

  1. Do the design and cost it, or
  2. Set a budget and work within it. (Obviously, this can put constraints on the creative process, but a budget is a budget.)

How Much is My House Worth Now and How Much After Renovation?

building new vs renovatingA realtor/appraiser can provide you with the estimated sale value of your home after the project.

This is helpful for determining a “safe zone” for your project investment.

An equation that Kerr likes to use is:  Finished value minus 10% = the starting point for the rest of the math.

So we are starting with a new value that is 90% of appraised value.

Love It or List It – Renovate or Build New?

I’m guessing you’ve seen the TV show Love it Or List It. It demonstrates that completing “the process” will give you the information you need to figure out what is right for you.  Things to take into account are based on:

  • Real costs of selling and moving, like realtor fees, Property Transfer Tax, temporary rent, movers and packing, even storage. These fees and costs often are much higher than people think, thus affecting the equations and decisions about building new vs renovating, or even to sell and buy somewhere else.
  • The value of getting exactly what you want vs. what is available out there.
  • Do you love where you live? This is a big one. If not, you may need to move to get what you’ve always wanted.

Renovate or Build New?

building new vs renovatingOK, we’re finally getting to the big question. Consider these issues to help tip the balance for you:

  • Does the home have a favorable existing non-conforming condition that is beneficial to keep?
  • Does the home have good “bones”, like 2×10 joists? Are the foundations in good shape?
  • Is the house and foundation properly positioned on the lot? Is it an appropriate size for the lot?
  • Do surrounding home values support the new finished product and its value? It can be nerve wracking to have the most expensive house on the block.

“Better Than New”

Yes, I would argue that something can indeed be built “better than new”.

With home construction, the words “new” and “quality” are not automatically interchangeable.  Many new construction projects here in Vancouver do not really represent what a reasonable person would call quality. Consider these images of “new” alongside a renovation by one of our teams.

Quality is care. Quality is skill. Quality is accountability. Quality is built with every small step carried out impeccably.

Of course, there are good reasons to build new and not renovate. Sometimes a renovation can’t fill the need.  But the same process works for both kinds of construction. Just be sure you get verifiable quality, not merely a word.

Amortize the “Pleasure of Ownership” of a Custom Designed and Quality Built Home

Large renovations and new homes both have significant price tags. Affordability and cost of ownership are important factors. But with current low interest rates, renovations look more affordable when viewed as a cost per month, rather than a final price. They also involve less time commitment.

For example, a $100,000 gourmet kitchen will cost about 450.00 per month over a standard term.  When you factor in improved values for the overall home and improving its layout, your true cost of ownership can be as low as 100.00 per month for a gorgeous new kitchen!

Whatever your thinking, feel free to share it with some of Vancouver’s established and trusted building contractors. Their advice will provide insights and perspectives you may not have considered.

Creative Commons Attribution: Permission is granted to repost this article in its entirety with credit to Kerr Construction and a clickable link back to this page.

Tags: , ,

Leave a Reply

WHAT THEY SAY

Some Testimonials from Our Past Clients

Fixing water damage at my house and doing some renovations. Great work - would recommend Kerr Construction came out and fixed a water leak I...

S.W., Richmond

HomeStars Review

Kerr Construction has given us our dream kitchen and more. Our renovation included the removal of a wall between the kitchen and dining room, the...

Jenney L., Vancouver

Kerr was very reliable and on time. They kept the worksite clean at the end of each day. Kerr was very knowledgeable, courteous, thoughtful and...

K.G., Vancouver

GuildQuality Review

Renovation of decks. The work was performed on time. I was always kept informed of their progress. The quality of the work was very good...

Neil, Kitsilano

HomeStars Review

Kerr Construction did an outstanding job on our very extensive and complicated renovation project. We have a circa 1925 Heritage home which we loved but...

Anna K., Vancouver

House Renovation. Good comprehensive work on project from initial discussion of concepts to architectural design to execution to lockup. Work was well done and has...

M, Vancouver

HomeStars Review

We were thrilled with Kerr Construction's work on our bathroom renovation and various tasks around our house. We needed a number of small things done...

P&H, Vancouver

HomeStars Review

Kitchen Renovation. All trades were wonderful, cleaned up every day, on time, pleasant to have around, and the finished product was totally up to our...

AGS, Westside

HomeStars Review

We totally renovated our 100 year old Kitsilano Craftsman home. We had to fire the first contractor as he was charging by the hour and...

D.S., Kitsilano

Houzz Review

Kerr Construction did repairs at the back of my house replacing some rotting cedar boards. They also built a shed addition giving me extra outdoor...

Havlock, Vancouver

HomeStars Review

HOW WE WORK

Our Projects Run Smoothly,
On Budget and On Schedule

We know that keeping projects on budget and on
schedule makes a successful home renovation or
new building construction

SCHEDULE A CONSULTATION

HOW WE WORK

Detailed Planning,
Skilled Workmanship

At Kerr we think through all the little details
and how things will function, like which way doors
will swing on the cabinets or the fridge

SCHEDULE A CONSULTATION

HOW WE WORK

The Homeowner is
Part of the Process

This puts the homeowner in control
and is the best way to make sure they
are getting the most value out of their project

SCHEDULE A CONSULTATION