When deciding whether to build new or remodel an existing home, choosing a location is an important part of the initial decision set, according to Kira Sterling, senior vice president/CMO-Marketing at Toll Brothers.
When choosing a home to remodel, you have to take into account location carefully, looking at what is going on in the neighborhood — are other homes undergoing renovations and what are the comps?
“In new-home neighborhoods, all of the homes are of the same luxury quality and, for future resale value, that provides a constant and reliable indicator,” Sterling says. “For an investment, if you are doing a renovation, you should have a degree of comfort where you build.”
Depending on the level of renovation planned or needed, the home could risk becoming over-valued for the neighborhood if not built consistent with the other homes, and that, in turn, could hurt future resale opportunities.
“Your neighbors will love you, but your home’s appraisal will be out of line with the others,” says Damon Bradley, sales manager at Maryland-based Williamsburg Homes.
Bradley adds that it’s important to evaluate the exterior and interior space constraints of potential renovation properties, as well as any permitting issues.
“Many older homes don’t have the design features that today’s homes do. Is it possible to renovate it the way you want? You may be constrained by what the home or lot will allow for, unless you do practically a whole tear down,” he says.
Some people enjoy the challenge of renovating a historical home or like the idea of living in a piece of history and acknowledge (or even welcome) the ups and downs and surprises that a renovation can bring their way. However, if it’s just a matter of getting what you want in a home, you need to consider which trade-offs are acceptable to you, such as making concessions for load-bearing walls or replacing old floor joists to handle a new tile floor.