At some point, nearly everyone considering a custom built home debates whether it’s better to build an entirely new house or renovate an existing home. There are advantages to both as well as situations where one is the clear choice compared to the other. The primary considerations cover building or legal regulations and financing issues.
The jurisdiction in which the property is located may have rules or policies that make it difficult for you to renovate (especially if you’re considering a home addition or an exterior renovation) or build new. Setbacks, easements, or height restrictions may prohibit you from building an addition. They may even prohibit total demolition in historical districts and require rebuilding and restoration instead.
If your existing home is in a community governed by a homeowner’s association (HOA), you’ll have to consult the regulations regarding changes to your property. It’s not uncommon for HOAs to exert control over the exterior of the custom built home, as well as some aspects of the interior like window coverings and paint colors. Be sure you check with them before moving ahead to avoid any conflicts.
The bank may not let you tear down your home because they’d lose their collateral. Ask your lender what their policies are for demolitions and new builds on the same lot. If you plan to remodel, you may want to talk to them about a home equity line of credit (HELOC). Canada has generous incentive programs for homeowners who make energy efficiency improvements, and your bank might be able to help you take advantage of them.
Interest rates often dictate the strength of the housing market. A low interest rate climate increases home sales, while it’s more challenging to sell homes as they increase. High interest rates often spur an increase in home renovations, since people decide to stay put until rates drop.
Once you’ve sorted through the possibilities, look at the advantages and disadvantages of a custom built home versus renovating. A new home will be more energy efficient and everything will have a warranty. It will cost more than many home improvement projects, however, and can often take longer.
As long as it doesn’t have major structural or infrastructure problems, renovating your existing home will be disruptive, but usually just for a short time. It may be easier to finance than a new home since getting a HELOC is usually a fast process.
Giving the decision about a custom built home versus a home renovation the time it deserves will result in you making an informed decision based on what’s possible and advisable in your situation. It’s a choice that will impact you and your family daily for the foreseeable future. If you need help walking through this process, Alair Homes is here for you. Contact us, and let’s schedule a time to sit down together and go over your options.