Gut & Renovate, Build, or Move

3,928 Views | 26 Replies | Last: 4 yr ago by dubi
BigAg_12
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TexAg1987
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My concern would be the value of the house after the remodel. Any comparable houses in the area? If everyone else is tearing down and building new then a restored old house still won't be worth much.
MAS444
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How old are you and what's your kid situation? We were in very similar situation 5+ years ago. 1800 ft2 3-2 not far from you (Brooke Smith in Heights area). We had no kids at the time. Spent considerably more than your estimate for an extensive remodel and addition (added a large family room and screened porch and expanded kitchen). It was great. Then we had boy girl twins who are almost 5 now. The size of the house square footage wise is fine...but the layout is pretty tight. Kids are in the same room now but will eventually need their own rooms. And the bedrooms are all kind of on top of each other. And no room for guests when kids have their own rooms. Long story short...we're moving soon.

Just saying that's a huge part of equation.

One thing you have going for you kids wise is Garden Oaks is supposed to be a very good elementary school. We almost moved there in part because of that.
BigAg_12
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30, been married for less than a year, and we'll start trying for children in late 2020. That's a huge reason for having to make this decision soon, my wife does not want to have children in the current house the way it is. I would have to agree with her.

Considerably more for your renovation?! Dang.
TMoney2007
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TexAg1987 said:

My concern would be the value of the house after the remodel. Any comparable houses in the area? If everyone else is tearing down and building new then a restored old house still won't be worth much.
In that neighborhood, they're not going to get any of their money back out of the renovation because its a teardown.

Overextending yourself financially to rebuild what will likely be one of the smallest new houses in the neighborhood is questionable too, IMO.

Even though I don't like the idea of completely filling up a lot with house, that's what the market is doing.
Aggietaco
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There's always going to be a market for a solid, smaller house in a good neighborhood. I'd lean towards renovation without much expansion, if any. 1,500 3/2 is fine for a family of 3 or 4.
AgLA06
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TMoney2007 said:

TexAg1987 said:

My concern would be the value of the house after the remodel. Any comparable houses in the area? If everyone else is tearing down and building new then a restored old house still won't be worth much.
In that neighborhood, they're not going to get any of their money back out of the renovation because its a teardown.

Overextending yourself financially to rebuild what will likely be one of the smallest new houses in the neighborhood is questionable too, IMO.

Even though I don't like the idea of completely filling up a lot with house, that's what the market is doing.


There's multiple homes either on the market or just sold that say otherwise.
BigAg_12
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Thanks for the input! Lot size is ~8,250 SF, in case that helps.

I should take current estimated market value, add the cost of the extensive renovation, and see if comps support that number, right? Because it wouldn't be a flip, we have the benefit of the market in this neighborhood continuing to grow until we sell in, say, 11 years.

If I took current amount owed on mortgage (I've owned for only 3 years), added estimated renovation costs, and looked at comps, it definitely comes in under. Thinking that's an incorrect way to look at it, however.
TMoney2007
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AgLA06 said:

TMoney2007 said:

TexAg1987 said:

My concern would be the value of the house after the remodel. Any comparable houses in the area? If everyone else is tearing down and building new then a restored old house still won't be worth much.
In that neighborhood, they're not going to get any of their money back out of the renovation because its a teardown.

Overextending yourself financially to rebuild what will likely be one of the smallest new houses in the neighborhood is questionable too, IMO.

Even though I don't like the idea of completely filling up a lot with house, that's what the market is doing.


There's multiple homes either on the market or just sold that say otherwise.
You think there's $200k in headroom?
AgLA06
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Yes. There's not a lot of 3 bed, 2 bath 1,500sq/ft+ homes under $800k. They command a premium between $650k -$800k. The majority of options are an original 2 bed for $550k or a new million + home.

I have friends that are probably going to buy an original home with enough lot to expand for this very reason.

Especially if he bought 3+ years ago.

A couple of examples (adjust for Sq/ft.

https://www.har.com/s/5E1B7A14D

https://www.har.com/s/72e8e0B577
AgLA06
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I'll propose a slightly different solution. Especially if kids are around the corner. Take your equity and buy a renovated Shepherd Park Plaza home. More home for the money and based on your lot size, you won't miss Garden Oaks since you have a relatively tiny lot.

The mothers groups, sidewalks, bigger original homes are worth the look. Only reason to stay in Garden Oaks is of you insist on Montessori.

Budget option
https://www.har.com/s/4aED3dFeBBb6

Upgrades
https://www.har.com/s/fb84AdC2884D8F8
https://www.har.com/s/6D2F4fdA24F4
https://www.har.com/s/8D7D14700e2f57b
SweaterVest
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Are you adding any square footage? There are plenty of original homes in GO that have been remodeled and sold for high value vs lot value.

The only issue for you might be size. My wife and I are about to renovate our 1947 house in GO, but it won't be a full gut job. We do have 2100sqft though and we are adding another 200sqft room in the attic to make it a 4 bedroom 3 bath which I'm hoping will allow us to recoup a good bit of what we are putting into it eventually.

I'm happy to share the proposal we got from a contractor if you want to ballpark costs. For reference we are doing new siding, roof, HVAC, plumbing, removing a load bearing wall and opening the entryway up, new exterior doors, new interior doors, trim, baseboards, etc., replacing a bunch of sheetrock, remodeling one, maybe two of the bathrooms, refinishing the original wood floors, adding a room upstairs, and potentially remodeling the kitchen.
SweaterVest
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Many lots in GO are larger than the ones in the links you posted. SPP is a great neighborhood though, and we considered selling our house in GO and moving up a couple of blocks. Ultimately we didn't want to eat 6% of the sales price in realtor fees and end up with a significantly larger note than we'll have after renovating, so we decided to stay put and renovate instead.
BigAg_12
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Very much appreciate your insight! Expanding towards the back of the property is definitely on the table to add SF. Love Shepherd Park Plaza too, we enjoy cruising / taking walks in that hood as well.
IslandAg76
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I don't think having a small house in a great neighborhood is a bad thing.
Diggity
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not a bad thing, but if most everyone in the neighborhood is tearing down, then value is typically in the land. You run the danger of throwing a lot of money into a property that might still be a "tear down" when it's time to sell.

If it's your "forever home", you might not care about that, but for most folks, that's something that needs to be considered.
htxag09
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Which elementary school is it zoned to? That makes a big difference in that neighborhood.

We're actually looking there and honestly don't even look at most remodeled homes. Issue in that neighborhood is the year they were built. So most aren't brick homes and they're laid out poorly, plus very small. So most remodels still have small, barely functional layouts, but nice finishes. So yeah, most truly are teardowns. Not saying yours is, as I haven't seen it, but most are.

We aren't buying new because everything is 3,500 sq ft+. We considered and are still entertaining finding a lot and building a 2,500 sq ft house. I wouldn't be too worried about it being small when it comes to resell. Seeing as the ones that do come on the market typically sell within a couple weeks and for way more than it would cost to build.

All that being said, we've focused our search more to finding a home we can remodel in Timbergrove.
one MEEN Ag
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Garden oaks isn't a 'value is only in the land' neighborhood. Don't trust what HCAD is telling you how they broke out the prices as it's all a joke. There's plenty of small homes on large lots that have been renovated and flew off the market. Just do a good renovation and be in line with modern trends: large kitchen and large master bed/bath.

Source BIL bought in garden oaks after outbidding a bunch of other offers for a renovated 3/2.
Diggity
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I'm not saying it is. I was speaking in generalities as I don't know this property.

You just have to make sure the renovation can be supported by the comps. If it's going to cost $150K to add a a few hundred square feet, that's probably not a great idea. If you can do a renovation that will extend the amount of time you can live in a place for 5+ years, then it would make more sense.

Question about Garden Oaks in particular. I always hear people talk about that school being great but that rankings don't support that. Is it just the Montessori aspect that people like?
MAS444
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I've just heard that from people whose kids have gone there.
AgLA06
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Diggity said:

I always hear people talk about that school being great but that rankings don't support that. Is it just the Montessori aspect that people like?


Yes and no. Our friends looking are infatuated with the Montessori program, so they'll screw themselves and their budget to only look in Garden Oaks.

Like many magnet schools there are programs in the school that the overall ranking doesn't represent. Then again with HSID just being taken over by the state and a huge shortfall in funding due to mismanagement, who knows what programs will be there next year.
AgLA06
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Edited.

I thought I was replying to the OP.
SweaterVest
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Do I know you? Are you somehow aware of my home value, what I purchased it for, mortgage, and lot size??
AgLA06
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Edited. I thought I was replying to the OP.
SweaterVest
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AgLA06 said:


Right, but yours isn't. It's also well below the average lot size of SPP. Most people don't want to go from GO to SPP because they would downsize lot size. You wouldn't.



Your going to pay 20% to a GC so your kidding yourself if that's your justification.

Look at the listings I posted in SPP. Even if you got your house for lot value, these would be the same price or cheaper for more house without months of renovation. And based on what you're talking about doing most likely leasing somewhere else for months as well.



You gave us a sq/ft, neighborhood, and year of purchase. I've lived within 2 miles of the area my entire life. I keep an eye on the market. I'm not going to look up the exact house you bought, but it isn't hard to get a decent idea.

That is a very interesting perspective I guess. I posted here to give OP a data point, not get in a pissing match about lot size or neighborhood. That said, each of your assumptions, whatever experience they may be based on, is incorrect.
AgLA06
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My bad. You replied to the listings like you were the OP. I didn't realize I wasn't talking to the same person.
NoahAg
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1. Buy a house in the suburbs.
2. Keep the current house as a rental.
3. ???
4. Profit!
dubi
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Will you sketch out the current floor plan?

You certainly don't need to spend that much money. Maybe open a wall for an open concept kitchen / den. Renovate the bath rooms. New paint, fixtures, flooring, windows.

We spend ~$50k to renovate a house near campus in CS. All new kitchen and master bath with paint and fixtures. New doors inside and out plus the prior owner had already done the windows.

This is our cost with my hubby doing most of the labor.
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