Helping an Aging Parent and Investing in Real Estate
Dear Monty: We plan to build an addition to our current home. Our home is ranch style with a walkout lower level consistent with the neighborhood pattern in size and amenities. The expansion would be on the main floor only and allow us to house an aging parent in a small apartment, plus add additional living space and another bedroom to the main floor. We just learned that a neighbor a few doors away recently passed away and willed the house to their children. It appears they are planning on selling it, as it needs a lot of repairs and updates. It occurred to us that it could be an alternative plan to the addition. Please give us a top-level overview of those two options.
Monty’s Answer: The addition to the current home is more intensive than the neighboring home project. An addition likely involves an architect, multiple plan revisions and integrating the expansion into the house to avoid appearing like an addition, with material choices and builder selection also gobbling up time. With the remodeling project, most, if not all, of the factors in the addition project are avoided. The one major decision with a remodel is to engage a builder or a general contractor or find subcontractors on your own. This decision may depend on local market conditions. If all the builders are months behind, it suggests the subcontractors will also be behind. Finding high-quality subcontractors in a builder’s market could be difficult. If contractors and subs seek work, being the contractor becomes a potential option.
Preparation
Each job is quite different. Does the addition fit in your location? The permits for the expansion are likely to be numerous and consume time. Then, there will be more inspections required because everything is new construction. An addition will require excavation and a foundation, where the foundation exists with the remodel. There will be fewer permits and inspections with the remodel.
Materials
Everything will be brand new with the new construction, from the foundation to the roof. While remodeling, even a major remodel will require significantly fewer materials. With remodeling, the older the home, the higher the material cost. The materials themselves will likely be similar or identical.
Duration
The addition will take far longer to complete than the remodel. The factors described earlier are many, and some take longer to complete. For example, the foundation work involves coordinating multiple subcontractors and then a few days after the pour to cure before removing the forms for backfill.
The Market
The fear with the addition is creating an overbuilt home for the neighborhood. Whether or not overbuilding comes into play depends on the area. With the remodeling project, the fear of overbuilding is negligible. Bringing a neglected property into conformance with the existing homes has few downsides.
Summary
There are many outside considerations in deciding which route is best for you. Do you have any time constraints, either on taking care of your parent or with the time you can devote to the project? Are material costs stable, going higher or contracting? Are you on a budget, or is money not a factor? The decision boils down to personal choice.
