Are you hooked on HGTV? Do you love watching people find old fixer-uppers and turn them into beautiful, trendy, “perfect” homes? We do. But, as homebuilders and remodelers ourselves, we stand in awe at the low costs and short schedules of these projects. How do these TV remodelers do it? How do they demo, fix, replace, adjust, improve AND furnish for relatively small budgets and in just a few weeks? How do they put new cabinets, quartz countertops, expensive sinks and faucets, new lighting, custom touches, new flooring PLUS $15,000 of new top-of-the-line appliances into a kitchen remodel having a budget of only $27,000?
It’s a mystery for which we have no answers.
It has been our experience that remodeling projects are costly, often more expensive than starting from scratch. Recent studies from HomeAdvisor make us think we might be right.
After surveying thousands of home improvement projects, HomeAdvisor found that the average bath remodel costs $9,348, and most homeowners spend between $5,666 and $13,031. (Of course there are a few “outlier” budgets, both higher and lower.) Because bath remodels involve several trades (carpentry, electrical, plumbing, drywalling, tilesetting, painting, mirror/shower door installation), they tend to take a long time.
Kitchen remodels are similarly costly and time-consuming. The HomeAdvisor study determined that an average kitchen remodel costs $20,556, and the majority of homeowners spend between $12,759 and $31,733. This does not include compensation for the time the kitchen is unusable, the inconvenience, the dinners out and so on.
As you shop for a new home, what do these statistics mean for YOU? Well, if you are deciding between a $350,000 new home and a $310,000 used home, but the used home needs the kitchen and two bathrooms remodeled, you should expect to add some $40,000 to your budget. Then, you must decide if or how you can finance the renovations and how many weeks you and yours can endure an upside-down living situation. These are personal decisions, ones only you can answer.
Finally, you would be wise to consult with an independent, experienced realtor (preferably, someone with no skin in your game) and ask how much the renovated house would be worth once it was fixed up. Would the new work add $20,000 or $40,000 or even $60,000 to the home’s value? In other words, would the work be worth the cost?
Buying and moving into a new home is an emotional experience, but since your house may be the largest purchase you ever make, it is also an important financial decision.
Three rehabs by our building company, New American Homes Inc.