Should you buy a new house or remodel your home?

TV’s home improvement shows are filled with fixer-uppers that were transformed into modern showpieces. You can do that, too. Or you can skip the renovation work on your current house and buy a new home. Each option has its advantages.

“The decision really depends on your life,” says Steve Cederquist, owner of Cornerstone Property Services and contractor for the HGTV show "Flip or Flop."

“Do you have the temperament for remodeling? If you’re looking for a project and have the patience to see it through, renovating an older home could be a good decision. Conversely, if you’re busy and lack the time or willingness to go through a remodel, buy a new home. But be aware of the trade-offs,” Cederquist says. Below are the important factors you should consider when weighing remodeling vs. buying a new home.

Analyze the location

Floor plans can be opened and flooring and cabinetry replaced. What can’t be fixed is the location. When deciding between remodeling or moving, consider proximity to amenities that matter to you. For example, new subdivisions may have a neighborhood pool and greenbelts, while older neighborhoods may be closer to mass transit or restaurants. Some cities or counties charge special parcel taxes (known in California as Mello-Roos) in addition to property taxes. So check the tax situation for the locations you’re considering and compare them to your current situation.

In many metropolitan areas, lots are generally smaller and less private than new homes, Cederquist says. Therefore, space for yards, pools and privacy is constrained. The square footage of new houses, however, tends to be larger than that of older homes. Increased space might be something you can’t get through remodeling and have to move for.

Saving on energy

“New homes are more energy efficient than older houses,” Cederquist points out.

Most homes built before 1940 weren’t insulated at all. Homes insulated between then and about 1980 often contained toxic materials such as asbestos and urea-formaldehyde, which emits gases when wet. If you live in an older home, bringing it up to today’s energy standards, therefore, may require unexpected work.

When remodeling, you’ll probably want to buy new appliances to replace older, less-energy-efficient ones. The Environmental Protection Agency’s Energy Star program, launched in 1992, has encouraged home appliance manufacturers to increase the efficiency of their wares, a benefit both to consumers’ energy costs and the environment. Under the program, appliances that meet the EPA’s standards of energy efficiency earn the Energy Star label. The program has expanded over the years, and products in 60 categories are now eligible to earn the Energy Star designation. If you don’t think upgrading your appliances to these standards is worth it, you might lean towards buying a new home.

Is ‘older’ better built?

There’s a myth that older homes are better built than homes today, thanks largely to the timber used for framing a century or more ago. The notion isn’t true for all old homes, though.

Unless older homes have been renovated, they won’t meet modern building codes. If you live in an old house, it’s a good idea to do an inspection to get a sense of how much renovations might cost. “A home inspector should determine whether the electrical system is grounded and whether the electrical panel is adequate for the planned renovation,” Cederquist says. Also, have a camera inspection of the main sewer lines to ensure tree roots haven’t damaged them. Repairing the lines and removing the roots can cost thousands of dollars, which might deter you from renovating.

Renovating? Plan for the unexpected

If you decide to renovate, expect the unknown. Cederquist recommends having a home inspection and consulting a contractor to help estimate costs for the designs you have in mind.

“People have a misconception that you can just remove a wall,” Cederquist says. Before that can happen, you need to “understand the engineering.” Contacting a professional engineer and reviewing the blueprints lets you know whether a particular wall is load-bearing or whether it can be demolished. An engineer can suggest alternatives to help you get the design you want while maintaining the structural integrity of the building.

On some TV shows, complete remodels are achieved in six weeks. “Most of the remodels on 'Flip or Flop' take three to four months and know all the details beforehand,” Cederquist says. Do that in your own remodeling, too. Expect a large project to take a few months and know all the details – paint colors, materials, cabinet and counter choices, bath fixtures, etc. – before you start.

Whether you remodel or move is up to you. Go into the decision with your eyes open to the pros and cons of both options. There’s no single best decision, but either way you need protection for your purchased or renovated home. Find out how Nationwide homeowners insurance can cover your home, new or old, from a variety of damages with policies that fit your budget and needs.