Why Buying a Renovated House is Better than a New Build
Updated: Apr 25
One of the things that has been consuming my thoughts lately as a new “Renovator of Houses” is why it’s so expensive to purchase a house that has been renovated and sold. And what makes them so much better than a new build house in a subdivision. Of course, the first thing that comes to mind is the character. I mean, have you ever seen a ton of character in a subdivision house that shares a floor plan with your neighbors? But, it’s more than just the character of the older home. It’s like shopping at a small local owned boutique store versus a big box store. The big box store is going to have better prices because they purchase in large lots and can pass that savings on to the consumer – while still making a pretty substantial profit. The small boutique owner purchases things in smaller quantities and doesn’t get that savings. However, the buyer for the large box store is sitting behind their big corporate desk on a computer ordering all those items in large bulk that will yield the largest profit. The owner of the small boutique store goes out, talks to the artisans and hand picks each item for their shop. They touch it, feel it and decide if it’s the style or quantity they want and sometimes seek out artisans to hand-make items. So, when you purchase the item from the boutique shop, you may not be getting the price of a large box store, but you’re getting quality and uniqueness of the item.
That analogy is exactly what happens when someone rehabs and resells a house. Anyone can build a new house and sell it – I guess. But a person rehabbing a house needs to do things a bit different. They first have to ‘buy’ the house as it sets, so that becomes the first line item on the budget sheet. After they buy the house, they must then determine if all the existing wiring and pipes are in working order and up to current code - depending on the age of the house, it is most likely it is not. To do that, they must remove things and then put them back together - that right there, doubles the labor costs. Then they need to buy materials that ‘fit’ into that house – whether in style or size. Think back to the small boutique owner who looks and feels things to ensure it’s a good fit for the store – same here. To rehab a house properly, you can’t just throw stuff in that is setting in a large warehouse – each item needs to be ordered and purchased specifically for that property.
Many builders of the new home construction subdivisions have an architect who designs 3-4 floor plans and a designer who designs 3-4 different styles and colors that clients can choose from for their house. When rehabbing, an architect has to design any new layout based on the existing walls and the designer is choosing colors and styles that go with the style, age, or history of that house. Everything is carefully thought out and carefully installed.
So, the next time you are in the market for a new home, remember the Boutique Shop Owner :)