Looking to move but can’t decide if you want to buy land and build or purchase an older house and renovate? Don’t worry, this is a tough choice because both options present numerous opportunities and challenges.

We’ve outlined three pros and cons for each option to consider during the decision-making process:

Renovating

Pros: Location! Location! Location!

 Whether it’s in the quiet suburbs or the hustle and bustle of downtown, location matters! When choosing to buy and renovate, you have your pick of the litter in terms of location. Take Saskatoon, for example. Do you enjoy eclectic neighbourhoods with mature trees that create a dome-like ceiling of leaves? Consider checking out the City Park, Mayfair, Nutana, and Caswell Hill neighbourhoods! How about proximity to the University to attract student renters? Try Grosvenor Park, Varsity View, and Greystone Heights! Having a vast choice of neighbourhoods is not always possible with new builds, but it is when the buyer intends to buy and renovate. Additionally, it is easier to pick a neighbourhood that will help forecast expected costs within or under budget.

Pros: It’s a perfect time to put those DIY skills you learned on YouTube and HGTV to use!

Renovating a home can be fun! All of those years of stacked up knowledge from binge-watching HGTV on Saturday mornings will finally pay off. Renovating a property is the perfect time to add personal touches and make the space your own. You never know what you’re capable of until you actually try it. However, when things go south, don’t be too hard on yourself. We all make mistakes, and it’s important to learn from our mistakes and fail forward than fall back.

“Some advice from a beginner: never judge your full potential based on your first run.” – Chip Gaines, Fixer Upper

Pros: Higher resale value

Whew! Maybe all the hard work is paying off! If you resell the property, there is a greater chance of increased returns with renovated properties. A vast market of homebuyers wants to buy ‘move-in ready’ properties and not do any additional work. Just think, they are looking for some of the same qualifications as you were when you bought the property – location, maintenance costs, unexpected renovations, etc. Benefit off of these homebuyers by alleviating some of their pain points.

Cons: Unexpected Maintenance

It’s not all sunshine and butterflies. Choosing to renovate in a mature neighbourhood will present unexpected obstacles and maintenance issues. Maybe it’s rusted pipes, a weak foundation, or asbestos in the walls – nothing is off-limits. Before purchasing, it is crucial to budget for these unforeseen maintenance costs.

Cons: Dealing with Contractors

Don’t get us wrong; there are tons of excellent contractors out there. However, it’s the ones that are consistently late or don’t show up, overcharge for materials, and don’t get the project done on time that put a harsh spotlight on the industry. Dealing with contractors can be a whole gig in itself. To keep the project on schedule, it is your responsibility to create checkpoints with contractors to create a healthy working relationship moving forward.

Cons: Timelines are… not always on schedule

As mentioned before, estimating timelines can be complicated when dealing with contractors. Slow turnovers cost money. Think of it this way – for each additional month it takes to finish renovations, it costs you one month’s mortgage plus property taxes. This is all cash outflow as there is no cash inflow from tenants living in the property (if you choose to rent it after). You need to hold yourself accountable too. To be conservative, always overestimate timelines when forecasting monetary expenses.

Buying New

Pros: Neighbourhood Demographics

There are similar demographics of those who choose to buy land and build a property in a new neighbourhood. Not always, but the population is generally on the younger side (Millennials and Gen X) and are second-time homebuyers looking to settle down and start a family. They are looking for an area close to new schools, parks, and a safe neighbourhood for their kids to play and grow up together. As a result, a community with a sense of belonging is formed.

Pros: Designing the entire property

Unlike renovating an established house, buying new can be a fun opportunity to design the property from start to finish and make it personal – landscaping and everything. Are you going to pick a cape cod exterior? Tudor? Contemporary? Traditional? Greek revival? The choices seem endless!

Pros: A fresh start!

Buying a new property is the perfect opportunity for a fresh start – for some, a lifestyle change. When the process is all done, you’ll finally be able to let out a sigh of relief, knowing those long and tiresome months were all worth it.

Cons: Expenses

Buying into a new neighbourhood comes with additional costs ­– higher property taxes, heightened land costs compared to older neighbourhoods, and the cost to build the house. Additionally, as the process moves along, there will be additional costs accrued when adding those personal touches – such as that built-in coffee bar you’ve always dreamed of or the vents that blend in with the flooring. Those ‘one-off’ occurrences start to add up quickly if they are not prioritized and controlled.

Cons: Lack of Landscaping

With a new construction in a new neighbourhood comes a lack of landscaping and greenery. Initially, landscaping may not be everyone’s top priority in the neighbourhood – adding a driveway or fences might be instead. As a result, newer neighbourhoods lack the overall ambiance and character of an established neighbourhood for the first couple of years.

Cons: Small Lots

Have you ever been invited to an event in an older neighbourhood and think to yourself, “How does this backyard feel like it’s the size of a football field?!” This concept is not typically prevalent in new suburban neighbourhoods (in Saskatoon, at least). Larger lots come with higher expenses in new neighbourhoods. Think economics and opportunity costs – “Am I willing to give up a bigger lot for a new construction? Or am I willing to give up a new construction for a bigger lot?”

Conclusion

Location, time, and lifestyle are common themes amongst the two options. While both options present unique challenges and benefits, it is unfair to examine them both under the same spotlight. Ultimately, the choice is yours and we are here to support you along the way!