Your dream home doesn’t always have to be built from scratch.
- Expanding your home has its limits, but it could save you a lot compared to buying or building a new home.
- The housing market is constantly changing, so what makes the most sense to you might change over time.
In the spring of 2020, with a baby on the way, my husband and I knew it was time to do something about our home. The small two-bedroom starter house we lived in was already cramped and we knew we would soon need a lot more space.
Although we briefly considered buying or building a new home, we eventually ended up adding to our existing home so we could keep our spacious property. Money wasn’t our only consideration, but we ended up saving a boatload by taking this route. Here’s how.
Buying a new home isn’t always better
Buying new allows you to design your home exactly how you want it, but it often comes at a high cost. This was especially true for us at the start of the pandemic, when the supply of homes for sale in our area nearly dried up. The houses for sale did not meet our expectations and prices were climbing rapidly.
Building a new house was also a possibility, but we knew that would probably not fit into our schedule. Plus, we could have easily spent $500,000 or more on the house we wanted. The pandemic-related supply chain issues were already starting at that time and it wasn’t too difficult to predict the price increases on the horizon.
So ultimately we decided to add on and remodel our existing home to give us some extra space without all the work involved in brand new construction. We already had a well and electricity, so we didn’t have to worry about paying to add them. Also, we were living in the house at the time, so we weren’t paying to maintain two properties.
We also took care of much of the finishing work ourselves. My husband is very hands on and we also had help from friends and relatives so we didn’t have to pay someone to do it for us.
In the end, we saved about $150,000 by choosing to add rather than build new, and ended up with a finished product much sooner. We had to make some sacrifices with the layout, but overall it turned out to be a good decision for us.
Is adding to your home the right decision for you?
Just because adding to our home was the right decision for us doesn’t mean it will be for you. We were fortunate to have a large property which gave us plenty of room for an addition, but others may not have the space to do so.
And adding may not be cheaper in all situations. The only way to know if this is the right call for you is to get quotes from a few contractors and compare them to the cost of homes available for sale in your area. If new building construction is on the table, be sure to talk to the contractors about your expansion and new home plans so they can give you accurate pricing information for each option.
If you’re unsure of your budget, talk to a mortgage lender to find out. Once you know what you’re pre-approved for, you can start figuring out what’s doable for you.
Given the record inflation we are experiencing right now, you may not be able to afford the home you want right away. But it is okay. There are already signs that mortgage lending could slow this year and that a drop in demand could lead to lower prices. What you want to do may not be achievable right now, but if you give it even a few months, you may find that changes.