Crazy to buy house to add addition and remodel?

isaac-1November 17, 2012

My wife and I seem to be finding ourselves in a bit of an odd situation. We may be unexpectedly selling our house for considerably more than its market value. We like our current house, it is an old home (about 110 years old), located in a prime real estate area near the center of the small city we live in, Now a developer wants to buy all the property on the block to clear it to build a store.

Which brings us to our next problem, if we sell our house we have to live somewhere, at the moment the house market here is reasonably priced, although with a very limited number of houses that meet our modest requirements (location, size, fenced yard, etc.). We have however found one that we both like (mid century modern built in 1961), there are however a couple of MAJOR issues, and some minor ones.

First the color scheme inside needs a healthy dose of paint, who paints a beadboard living room cathedral ceiling Olive Drab green? (cabinet work too)

Second the kitchen has a modern-ish remodel, but my wife hates the narrow slotted split level wrap around pass through counter. So some major cabinet work would be needed there, she also wants a gas stove, and the one now installed is electric.

Third and this is the big one, the master bedroom is tiny (10x11 ft), the attached master bath is not much better, to fix this would require adding on to the back of the house (this would simply be extending the existing roof line a few feet), probably making a 400 or so sq ft addition to the current 2100 sq ft house.

So my question is, is it insane to consider buying such a house just to go in and do such a major remodel?

If not, the options are build (at a price that much higher than buying existing, even existing that is just 3-4 years old), where do we live while that happens...

Any other thoughts or advice?

thanks

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cearbhaill

Not crazy or odd at all- people buy and remodel homes all the time!

    Bookmark   November 17, 2012 at 5:41AM
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EngineerChic

Not crazy. However, you have a fenced yard as a requirement and its one of the easiest things to do to a property. $10k or so, but totally easier than an addition :)

If you love the yard and location, then you will probably feel okay about the fact that you won't make money on the addition (you will lose money). We made the exact same choice and I don't regret it. Inventory was low, our lot is amazing (woods behind us and you can sort of see a hayfield after that - 25 mi from a major city). But still, if we sold today we wouldn't get near what we put into the place and there are still things I want to do.

    Bookmark   November 17, 2012 at 8:49AM
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cmarlin20

Not crazy at all, very common. I've done it several times and so do many others. This way you can get the home you want, most homes don't meet all the wants people have in a house.

    Bookmark   November 17, 2012 at 10:13AM
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live_wire_oak

If the majority of the house is desirable to you, and all that is needed here is sandblasting of the ceiling, a major kitchen redo, and a small master addition, then no, you're not crazy. But, also be realistic about what such projects cost. In a mid priced market, you're looking at at least 150K. More if you want upscale choices like a Wolf/SubZero kitchen and a luxury spa master bath. That could easily run you another 100K more.

250K isn't crazy to spend on "updating" a home with good bones. Not at all. But, only do this for yourself rather than "resale". Because you won't get to "add" that 250K to the cost of the house as "added value" from the remodel. It doesn't work like that. No matter what fiction HGTV has people believing.

    Bookmark   November 17, 2012 at 10:41AM
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isaac-1

thanks for the thoughts, I guess I should have said fenced yard, or yard appropriate to being fenced, not all are.

One more question for you about lot layout, just to get some outside thoughts:

The house is back from the street with a large front yard as was becoming popular when it was built (110x300 ft lot) with the house roughly in the center judging by google maps overhead view.

On one hand I don't want to be right on the street as I am now (the edge of my porch is 13 ft from the edge of the sidewalk, back yard is about 175 ft deep now), meaning the proposed house while on a larger would have a similar sized (slightly larger) functional back yard as I have now (not as deep, but somewhat wider).

So I guess what I am trying to ask is, do you think that this lot layout is too wastefull with a big front yard, assuming under utilized front yard, and am I over compensating for the lack of front yard I have now?

(optional reading paragraph-->) The house on the north side is about even with the one under consideration and the one on the south side is on an even deeper lot and sets back much more, with the front of that house probably 250 feet from the street, almost even with the back of the property I am considering, it is also offset farther to the side than would be suggested by lot dimensions as there is also space for a never built (and never will be) street right of way between them.

    Bookmark   November 17, 2012 at 10:51AM
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weedyacres

Not crazy at all. We bought a house with good bones but plain finishes, on a great lot and made it wow. We put way more into it than we thought we would (scope creep as we lived in it) but love the finished product. Total cost is probably less than we could have built it for on an empty lot, but a large reason for that is that we DIY'ed nearly all of it (hired a contractor to build the shell of the addition).

Before jumping in, I'd recommend looking in detail at what your costs will be to renovate and consider what you could get for that sales price + reno cost amount with both new and existing construction. live wire oak has lots of experience, but those numbers may be way off from your location, as they vary widely be geography.

Our house is now on the market, so we'll soon (hopefully) find out if we made or lost money on the renovations. If we make money, it will be because we DIY'ed and because we are selling the spare lot separately. But owning a home isn't just about making a profit, it's about enjoying your life there.

    Bookmark   November 17, 2012 at 1:10PM
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DLM2000

It's not crazy as you are being told over and over! We bought our house BECAUSE it lent itself so well to the type of addition/remodel we wanted to do and the result was we got exactly what we needed. As for the adjoining properties and how neighboring houses sit...... to me it's an advantage if they aren't all lined up like ducks in a row because of the sense privacy.

    Bookmark   November 17, 2012 at 1:50PM
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adellabedella_usa

The upside to buying and remodeling is that you can see what works and what doesn't and then go from there. The problem with building is that you really don't know how the house works for you until it is built. If you go back and start remodeling, you are wasting money you just spent.

    Bookmark   November 17, 2012 at 4:25PM
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lazy_gardens

The large front yard can be dealt with by creating some walled courtyards and landscaped areas to use for adults' socializing.

    Bookmark   November 18, 2012 at 3:39PM
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