FEATHERING ONE’S NEST: Lookouts When Buying, Building or Renovating a New Home by Hampton Rhodes

Lookouts When Buying, Building or Renovating a New Home

The decision whether to buy, build, renovate or rent a home can have vast implications on not only your happiness, but on your immediate discretionary income as well as your long-term financial planning for your retirement.

The reality is — we live in a very mobile society, and very likely, we will move for a variety of reasons, many more times than you probably imagine.

According to research published in 2016 including statistics provided by the Census Bureau, in all likelihood, the average American will move 11.4 times during his or her lifetime — most of those (~7.5 times) occurring after the age of 21 — or when they are financially accountable adults and not moving with their parents or families.

Cost of buying
For newly emancipated singles and families, “starter home” neighborhoods — areas that are older and less desirable, but are more affordable and offer opportunity (or possibility) to increase value of the homes through renovating or up-dating — have particular appeal.

The 2014 average cost to buy an existing house is (depending on where you want to live) variable from state to state and in every location within that state, county or city. Per square foot prices weigh-in at $55, $66, $72, $80, $84, $92, $110, $118, and $328 per square foot, and combine to produce an average of $112 per square foot, which is probably a reasonable figure for many areas of the country. And that is just for the purchase of the home — renovations are extra and usually more expensive on a per-square foot- basis.

Your local realtor can tell you which areas are growing, which areas are declining, and which areas offer more opportunity for increasing the value of your investment over the amount of time that you anticipate being in the area. And if your realtor is reluctant to share that information with you, you can find it yourself on the Internet through simple searches.

Cost of building
Building a home can be a dream or a nightmare — and quite often both — providing your family many happy years when living in the custom house — but also providing problems and difficulties when its time to move on.

The 2014 average cost to build a new house comes in at $305,372, which would put a 2,000 square foot home costing about $150 per square foot. This will obviously vary greatly with all the costly variables involved, so the cost could range between $178,010 and $466,493.

On the one hand, the wonderful dream hand, you get to design what you think will be the perfect layout for your family’s needs — space requirements, amenities, luxuries and necessities — and customize the home to your specifications. On the other nightmare hand, you may be creating a design that only fits your specific needs and no one else’s making the selling of your house nearly impossible. Over customization of housing is at an all-time-high right now throughout America, because little forethought is put into the prospect of re-selling the house for your next move.

Cost of renovating
The cost of renovating actually depends on which rooms are to be renovated and if you are planning on adding additional space to the rooms. The level of luxury or quality or “trendiness” of the renovations can also jack up the prices to scary levels that discourage many ambitious buyers.

The main thing to think about during remodeling is cost control. Keeping the costs within a pre-planned overall budget is key. People who renovate tend to get swept-up in the creative process of making their homes fabulous, and forgetting that the bill has to be paid at the end of the project.

The website homeadvisor.com has a True Cost Guide that will help determine estimated costs, by room and most importantly — by location.

Location, Location, Location
Whether the reason for your move is for a job opportunity, a military transfer, a family necessity, retirement or simply a desire for better weather, the location is the single most important factor in making a wise decision. The location will determine the cost ranges of buying, building and renovating as well as renting and can vary greatly. Websites like zillow.com, trulia.com and realtor.com can help determine which are the best locations worthy of your consideration.

The Internet can be a huge resource in helping you determine which location will fit your lifestyle, your needs, your desires and your affordability. By researching neighborhoods in advance online through these previously mentioned and linked reputable websites, home buyers, builders and renovators can get a better handle on where to buy, and save themselves a lot of time, gas and shoe-leather!

How Many Times an Average Person Moves – fivethirtyeight.com
True Cost Guide

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