It started with This Old House and continues today with Fixer Upper, Flip or Flop, and countless other home-renovation shows: the trend of romanticizing big DIY projects that seek to transform aging homes into contemporary showplaces that are loaded with history and charm.
There’s no doubt that with enough time, money, and expertise, an older property could become the updated home of your dreams. But in the process, you may actually wind up spending more money than you were planning—and, in some cases, even more than you would have spent if you opted to build a custom home from the start.
How is that possible? Let’s take a look at the top four reasons why building a custom home can actually save you money:
1. It already matches your needs and taste.
By far, one of the best things about a custom home is that it already suits your style and fits your needs—no renovation required. You select a customizable floor plan—or create a fully custom one—that includes the type and size of kitchen you want, the number of bedrooms and bathrooms you need, and the layout that will work for your lifestyle. Then, through the design process, you get to select everything from flooring and paint colors to cabinets, countertops, and faucets. On the day you receive your keys, the home already feels like it is yours.
On the other hand, updating an older home to meet your needs and suit your taste can require a significant commitment of time and money. Many people who renovate an older home want to update its style so that it doesn’t feel dated and drab. This usually involves paying retail prices for flooring, cabinets, appliances, and more. Many homeowners also want to make changes to the floor plan, taking down walls to better accommodate modern living.
These changes can easily cost tens of thousands, or even hundreds of thousands, of dollars. For example, a basic kitchen renovation alone averages $22,000. Creating a kitchen with an open floor plan by knocking down or moving walls can easily double that cost.
2. A custom home is move-in ready.
Once a custom home is purchased and built, all you have to do is move in and get settled. But if you opt to buy an older home, the renovation process may disrupt or delay your move for weeks or even months.
We’ve heard horror stories in which a renovation takes longer than planned, and construction dust and noise make the home unlivable in the meantime. The new owners are forced to move into a hotel room, leading to greater cost and inconvenience.
3. Newly-built homes are more efficient.
Over the last several decades, enormous strides have been made in the efficiency of water heaters, kitchen appliances, heating and air conditioning systems, and more. Meanwhile, windows, building materials, and insulation have improved as well, helping to keep newer homes cooler in the summer and warmer in the winter. Custom homes that include these newer appliances and materials aren’t just more comfortable—they provide owners significant cost-savings opportunities that can easily add up to thousands of dollars a year.
By contrast, older homes usually have low-efficiency appliances and systems, which translate to higher monthly energy costs. If you were to upgrade items like your refrigerator or hot water heater, you’d have to invest hundreds of dollars and wait several months before breaking even.
4. Renovations can cost more than planned.
As we mentioned above, a custom home is ready to be fully enjoyed the moment you receive the keys. And you won’t have a lingering worry that unexpected costs might emerge. After all, everything is brand new and up to code, and most items are under warranty for a number of years.
However, in a renovation situation, it’s not uncommon for the homeowner’s initial budget to get blown to bits. Often, the crew uncovers additional problems during demolition or renovation, such as faulty wiring, mold, and asbestos—all of which can be pricey to rectify. Many older homes require thousands of dollars to be made livable, threatening even the most liberal renovation budgets.
Opt for Cost Savings
At first glance, it may seem more cost effective to purchase and renovate an older home rather than buying a custom one. However, as you can see, custom homes can actually wind up costing less in the long run.
When you tack renovation costs on top of the purchase price of an older home, an HGTV-inspired project can easily spiral out of control. In many cases, you’ll be better off selecting a home that is custom-built for you and your family. That way, you’ll ensure you get the home you truly want—while also staying on budget.