Author Topic: Renovations in the age of COVID  (Read 714 times)

nkt0

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Renovations in the age of COVID
« on: May 08, 2020, 08:39:41 AM »
I have a dilemma that i'd like to hear people's thoughts on.

Prior to COVID, i had been planning for over a year to do a major tear down and renovation of our house. I had everything lined up, contractor in place, permits, and even moved out of the house into a temporary apartment in mid-March. Now there is an indefinite construction hold on the project because of city regulations around COVID. Our jobs are secure for now, but i am worried that will not be the case long term.

This project would increase our leverage in the house from about $90k to $340kit's a major rebuild. We can currently afford it, but if one of us loses our job, it will be very tight financially. Plus i do not know what the real estate market will be like in 6 months, 12 months, 24 months+. I am also afraid we could easily go underwater on the mortgage.

Construction has not started yet. The contractor is owned for some expenses, including permits, etc.

Our apartment lease runs through December. I don't think we can get out of that.

Would it be best to cut my loses and walk away from the project? Other thoughts?

affordablehousing

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Re: Renovations in the age of COVID
« Reply #1 on: May 08, 2020, 12:18:00 PM »
I was just on the other side of you, ready to start demo when the sheltering started. Our project was going to be about $500K and 8 months. We feel lucky we got to shelter in our house rather than a rental apartment, but I think the prevailing mode of thinking is- are you doing this renovation for the short term or the long term. For us, this would transform the house into a safe place for us for several decades. If values fall in the moderate term (for the next 10 years) I think we still would prefer to live where we are rather than trade up and out to a fancier neighborhood, and our project would make our house just the way we want it.

The lesson we've learned is that every project benefits from more time to plan, so use the pause wisely to consider every element of the design, do your material research, look for Craigslist deals to save on your finishes budget, and even feel comfortable rethinking big decisions. We uncovered a lot of details we could optimize, new materials that made more sense to us. We found a load of primo siding on Craigslist that will change the way we approach the interior.

There's always a silver lining.

nkt0

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Re: Renovations in the age of COVID
« Reply #2 on: May 11, 2020, 06:55:56 AM »
[A]re you doing this renovation for the short term or the long term[?]

Thanks for the hopefulness! We are definitely doing this for the long term, but things seem pretty bleak right now even for long-term thinking. We're considering walking away from the project, knowing we might have more options in the future if housing prices in our area are depressed by a lack of demand.

affordablehousing

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Re: Renovations in the age of COVID
« Reply #3 on: May 11, 2020, 10:38:47 AM »
Only you can make the decision. Do know that renovations NEVER pay off directly. If your renovation doesn't result in a house that is more perfectly suited to you than any other house you can buy, save and buy the other house. If your renovation results in the perfect design for your family, your location and the way you live, do the renovation. A lot of this rests on how good the design and architect is.