WWYD - renovate or knock down/rebuild (or sell as-is)

[Hillbeans]

DH and I have two main residences, one of them is a 1000 SQ 3-bedroom ranch style home on .45 acre (the property is in a good location, corner lot) and one is a 2B2BA Condo. The ramch home is about 60 years old and needs a major overhaul. Current mortgage on the home is about $100K and value as-is around $225K.

We are trying to consider all of the options for this home where two adults will be living (empty nesters later this year).
1) Do nothing, sell it within 2-5 years. Move somewhere that costs less and downsize.
2) Refurbish everything at the cost of around $40K. New siding, new landscaping, new windows, update floors, update kitchen and add a 1/2 bath.
3) Knock down the home and put up a pre-fab house. Other larger/nicer homes in the neighborhood are selling for $350K. This sounds like a ton of work (IMO) but it's an option. The area is desirable for it's proximity to jobs and good schools.

 

[barkley]

2) Refurbish everything at the cost of around $40K. New siding, new landscaping, new windows, update floors, update kitchen and add a 1/2 bath.

just going to say-i think this is a VERY LOW estimate for the amount of work you've listed. i got some tremendous deals and still spent within $10K of this to do just one bathroom as a remodel on a shower/new counter tops/new flooring (with the same lvp in a few other rooms-not throughout home or anywhere near 1000 sq feet). i did a small lawn with cement mow strip-around $7K. replacing just one sliding glass door a couple of years ago was close to $1K. i would encourage you to get estimates on the scope of work to determine an accurate amount for renovations.

 

[kymom99]

How could you knock down a house that you still owe a mortgage on?

 

[Disneylover99]

I’m the do nothing and sell it type.
So that’s what I’d do.
Way less fuss. Headache free. No hidden fees, compared to renovation costs anyways.

 

[longboard55]

Sell it as is. Very hard to make money off a remodel. Don’t believe what you see on those home remodel shows

 

[HopperFan]

DH and I have two main residences, one of them is a 1000 SQ 3-bedroom ranch style home on .45 acre (the property is in a good location, corner lot) and one is a 2B2BA Condo. The ramch home is about 60 years old and needs a major overhaul. Current mortgage on the home is about $100K and value as-is around $225K.

We are trying to consider all of the options for this home where two adults will be living (empty nesters later this year).
1) Do nothing, sell it within 2-5 years. Move somewhere that costs less and downsize.
2) Refurbish everything at the cost of around $40K. New siding, new landscaping, new windows, update floors, update kitchen and add a 1/2 bath.
3) Knock down the home and put up a pre-fab house. Other larger/nicer homes in the neighborhood are selling for $350K. This sounds like a ton of work (IMO) but it's an option. The area is desirable for it's proximity to jobs and good schools.

It does not sound like you are committed to the long term for a "family home" so ...

I agree with Barkley that the renovations are underestimated. Having done several of those I think unless you plan to stay a LONG time to enjoy the upgrades, monetary costs and aggravation, not worth it.

No way I'd scrape and build, especially if not committed to long term. So much work for little reward based on comps shared.

I chose #1, do nothing but minimal to make it enjoyable to live in (paint, new rug etc) then sell it as soon as you are ready to either move to your condo OR move to something smaller to suit your current lifestyle.

 

[tvguy]

How could you knock down a house that you still owe a mortgage on?

Well, if the house is really bad, the appraised value may be mostly in the land. My wife's best friends mom sold her home on 5 acres and had multiple real estate agents do comps, and they all agreed the selling price would be higher if she tore down the house.

 

[tvguy]

I agree with Barkley that the renovations are underestimated. Having done several of those I think unless you plan to stay a LONG time to enjoy the upgrades, monetary costs and aggravation, not worth it.

The kitchen alone would likely be more than $40,000.

 

[OneOftheB's]

A house that is 60 years old likely has some things that aren’t up to current code and might some things that pop up once you start a renovation. I would sell whichever you aren’t going to live in, make the other comfortable but not a full renovation and sell it when you are ready.

 

[Robbie Cottam]

How much of this work can you do yourself?

Can you rent it as is and wait out the recession?

Can you sell it quick before the housing market tanks...

Any zoning by laws that require it to stay a ranch?

If the lot is in a great location and you can productively put in the sweat equity it might be worth bull dozing and replacing with a prefab....

Know the land value and rental market in my area, I would personally be inclined to raze what is there and replace with a starter pre fab colonial 3 or 4 bedroom.... 2 or 3 bath...

would be move in ready in 12 to 16 weeks and would rent for 3500 to 4000 a month.....

But I'm told I live in "one of those high cost of living areas"

 

[Luv Bunnies]

Personally, I would sell it as-is, pay off the mortgage and pocket the cash or invest it in upgrades to your other home.

 

[TwoMisfits]

I'm going to join the sell as-is club...

 

[starry_solo]

Sell as is

 

[Hillbeans]

How could you knock down a house that you still owe a mortgage on?

Sorry I should have clarified, would have to sell our condo and use the proceeds from the sale (it would cover).

 

[Hillbeans]

The kitchen alone would likely be more than $40,000.

The kitchen was redone in 2000 with cabinets and flooring, it’s small and wouldn’t need much to freshen it up. Maybe some new appliances like a range, refrigerator and sink.. Sorry I should have clarified this.

 

[kymom99]

Sorry I should have clarified, would have to sell our condo and use the proceeds from the sale (it would cover).

The reason I was wondering was because I’m in a similar position. Our current house has $90k left in the mortgage. It is about the same age as yours and in a great neighborhood of newer, nice houses. It’s on a double lot.

If you decide to sell, I would recommend staying away from selling to family or friends. We had a relative ask repeatedly to buy the extra lot. We finally decided, now or never, agreed on a price, had a surveyor separate it from the lot our house sits on, and they proceeded to back out. This after we decided to build a new house on our farm property at another site.

We had another relative offer to buy our house. Last week they backed out. Now we have to hurry and get it ready for sale before our new house is finished. I want to poke my eyes out. My husband is very stressed over it all.

 

[tvguy]

The kitchen was redone in 2000 with cabinets and flooring, it’s small and wouldn’t need much to freshen it up. Maybe some new appliances like a range, refrigerator and sink.. Sorry I should have clarified this.

Codes change. There may be things you have to do to meet current code. Not sure when the codes on GFIs changed, you may be current if they were upgraded after the change. I'm not an electrical expert, but my house was built in 1979 and as I recall the issue was my kitchen outlets had the GFI on the breaker in the electrical box. That had to be removed with outlets with GFI protection at each outlet in the kitchen.

 

[tcufrog]

A house that is 60 years old likely has some things that aren’t up to current code and might some things that pop up once you start a renovation. I would sell whichever you aren’t going to live in, make the other comfortable but not a full renovation and sell it when you are ready.

Opening up the walls of a 60-year-old house is opening up a can of worms. I'd have a very generous contingency budget. Have you had contractors give quotes? 40k is way too low.

 

[Travel60]

Agree with several above. Bathroom redos are minimum ~$25,000 per. Electrical anything is at least a few thousand. Windows, floors .... If your neighborhood is desirable and you go cheap by trying to do it yourself or using inferior finishes, the buyers won't give it any value because they will want to rip it out and do it right.

Clean it up (free), paint it white/cream/gray -$200 per room. Then sell it as is.

 

[China Expat]

My friend is a really good real estate agent. She told us to sell as is as the buyer might not like the scheme we choose. She says use your money to renovate your new purchase.