New Home or Remodel?

A Frugal Dad reader (Tracy) recently wrote to get my opinion on a housing dilemma she and her husband find themselves in. To summarize, the couple recently relocated to be closer to both their jobs and bought a “fixer-upper” that turns out to need more work than they originally thought. The purchase was made a bit hastily because their home sold quickly and the buyer wanted to take ownership in just three weeks. With buyer’s remorse setting in, and the couple finding themselves quickly outgrowing their space, they are wondering if a remodel/expansion is in order, or if they should try to find something else to buy (which is difficult given the options in their immediate vicinity).

I asked for Tracy’s permission to post her story here and allow Frugal Dad readers to offer their advice. I’ve provided my response below her original email, and hope you will do the same in the comments section.

From Tracy:

I have a burning question that ties in with a topic you’ve touched on before; your advice was, (I think I remember this correctly): When purchasing a home, “buy a starter home and stay there.” In our situation, our starter home was in a small, suburban tract community about 40 minutes away from my work and an about an hour from my husband’s. Throw in some heinous weekday commuter traffic and a couple of daycare stops (after a couple of years) and we decided we were spending way too much of our lives in vehicles. So, we purchased a 30-yr-old fixer much closer to our places of work and now our commutes are down to about 20 minutes each, one way. Right now, that’s about the only good thing we can say about the place!

We sold our first home much quicker than anticipated, and our buyers were relocating and really wanted to be in our home in three weeks. So we had to find a home and move in very little time. We’d narrowed down our choices to two houses in the same neighborhood. We made an offer on one, a sprawling ranch with an open layout that we both loved. The inspection came back with structural damage, as well as a number of other costly items; the seller was not willing to negotiate the price to offset fixing the items, nor was she willing to fix them, so we rescinded our offer. The other home came back with a clean inspection, but had many cosmetic issues such as 30-yr-old green shag carpet, layers and layers of floral wallpaper, etc.

Now, three years later, we’ve made a few updates but still have a long way to go. The kitchen, which I thought was “quaint” when we were under the gun to find shelter, is actually barely functional and doesn’t really meet our needs as a family of four. It has one operating drawer for utensils, and only about six cabinets for dishes, pots, pans and food. There is no pantry.

The huge yard with lots of flowering shrubs (mostly azaleas) was a big plus when we were buying the place, but last summer they contracted a disease and promptly died, leaving us with gaping holes in the yard after mercifully putting them out of their misery earlier this year. There are also drainage issues with the property that we’ve been told would cost about $3500 to correct. Also, our minivan barely fits in the narrow one-car driveway, and when people stop by to visit–forget it. We’re forever moving vehicles to prevent blocking someone in.

The other items add up to about $14,000 in repairs/upgrades: Painting or removing the dark paneling in the den, replacing the green carpet with hardwoods or laminate, adding a freestanding pantry to the kitchen, replacing cracked tile in the bathrooms, replacing a cracked shower door, widening the driveway, etc.

We’ve only been there three years, so we don’t have a lot of equity to tap into for a second mortgage, nor do we want the added expense. Our current mortgage is about $1300. The average cost of homes in the neighborhood is around $190,000 (up from $165,000 when we bought the place). Most of the homes for sale in the neighborhood are about the same age with virtually no upgrades; ones that are fully updates go for much more, around $250,000, which is out of our price range. Newer homes in our range are generally about 30-40 minutes away, which would put us back at square one.

What do you recommend? My husband is reluctant to move, knowing that it’s a stressful ordeal, and often costly, even if the new mortgage ends up being less than what we’re currently paying. Thanks for any help!

Tracy, your story is probably not that uncommon from others around the country. I’ve known people who have taken on “fixer-uppers” for a variety of reasons and suddenly they find themselves without the motivation or means to continue. It’s a cautionary tale for taking on such projects, but you are here now, so let’s consider your options.

I guess my first question would be how much of the “cosmetic” issues could you live with, in the short term? Ugly carpet, a narrow driveway, and paneling in need of paint are certainly not ideal, but far from untenable. I’d recommend prioritizing these jobs and saving for them in a dedicated savings account. Things like drainage issues and leaky shower doors should be a priority as they can lead to further damage, while cosmetic items can be prioritized much lower.

Depending on how handy you and your husband are, perhaps some of the work can be done yourselves. House painting is a relatively low-cost project that can make dramatic changes to a space without much investment, assuming you don’t have to pay a paint crew to do the work. I’m not particularly good with flooring and tile work, so I’d probably have to hire someone for those projects. Ask around at work or at church to see if you can find someone reputable to do the work, or perhaps find a colleague who would like to tackle the project on the side.

Basically, my advice is to move slowly. What’s gotten many of us into trouble as a consumer society is impatience – the need for instant gratification. It sounds like you aren’t interested in taking on new debt, and that’s a good thing. Stick to that! It will take longer to make these repairs if you have to save up the cash, but at least you will own your new driveway, new floor and additional pantry, outright.

For the benefit of other readers, this is a good example of why I stress that there is no shame in renting. I’m not sure it was even an option in Tracy’s case, but assuming her and her husband had rented for six months to a year they could have bought some time to fully explore all available options before buying their next home. What would be your advice to Tracy and her husband?


  1. Tracy, I think you should stay in this house and fix it up. You’ve stated that all the houses within your price range in the area are in the same shape. If you move to a newer one, then you’ll be smack dab in the same situation you wanted to get away from. I think you just feel like you moved too quickly and want to back out – it happens. Fixing a place up is hard, and always takes longer than you think it should. I’ve found that the quickest way to feel like you’ve done something and make the house feel more “yours” is to paint. If you could paint the den yourselves, you may feel more accomplished and ready to take on the rest. Also, for the shower door and the tile, have you looked into local places that re-use/re-sell building material? Habitat for Humanity runs some, and if you’re anywhere near a metropolitan area, you should be able to find one. You can often find tile for cheap, and you may well be able to find a new shower door, too. I’ve also seen the one near us offering laminate flooring and they always have carpet (although it sounds like you don’t want to do that). I was also thinking that if you could post a picture of your kitchen, it’s quite possible that some of us could give you ideas for how to use the space – sadly, the small kitchen is an all-too-familiar problem!

  2. I also say to stay and fix it up. It could be a lot of fun, and when you’re done you will have your house exactly the way you want it.

  3. Hey Frugal Dad and readers:
    Thanks so much for all the suggestions! It sounds like you all vote unanimously for staying, and I have to say that’s a relief! While fixing up a home is a bear of a job, moving carries another type of stress entirely—one I’m not willing to experience again for awhile! I’ll definitely check out some of your blogs for ideas—I’d also like to add that our home is a split-level, which adds its own assortment of limitations and possibilities. Thanks again, everyone!

  4. I don’t think anyone will be surprised that I’ll say to stay and fix it up as time and money allow. I think now is the time to stay put and remodel instead of moving. While prices are down to buy, they’re also down for selling and a place that needs that kind of work is not going to fetch a desirable price and you’ll get more out of your money to make the place you’re in now one that you want to live in. If you want to see remodel progress on a home that sounds much like yours, check out my blog! We had green shag carpet and panel walls too and have been remodeling on a tight budget. It can be done and I recommend it for the way things are going in the market right now.

  5. I would suggest checking out Emily’s blog as I think it will give you some inspiration as you remodel.

    I would second the motion to stay and fix it as you go. Painting can be pretty cheap and easy to do even for a novice, so that might be a project you could handle right away. Often times that can make you feel like you’re living in a newer house!

    Ask around your church/work/friends to find someone who who is handy or can perform work at a discount that might be out of your expertise. I’ve had friends who have done their own remodel, or who are good at these types of things who are willing to help out free of charge. Just ask around!

    My wife and I were lucky in that we had plenty of time to find a house, and we were able to buy a brand new house that was in our price range. We wanted to avoid some of the issues that you can have when you buy an older house.

  6. Definitely fix it up yourselves. Go to Home Depot and get the how to books. They will also help you figure out what you need and even have classes on how to do some of the fix it stuff. My husband, who is admittedly handy, picked one up on laying tile and has since put down ceramic tile in our house and in our rental. Turned out beautifully and definitely adds to the value of your house. I agree painting is probably the fastest and easiest way to fix up your house. You should probably prioritize. What is driving you crazy the most and work on that first. Good luck.

  7. i’m another one voting for staying. you’d probably have to do some work on the house to get it ready for selling anyway. and the additional costs of RE commissions and a new mortgage just mean you will have less money to spend. give yourself a weekend off from house duties, then prioritize what really needs to be done. then get back at it.

  8. I’m teaching my 9 year old son about wise spending choices, and so we read Frugal Dad’s blog entry together today. My son’s suggestion was to fix the items that can lead to structural damage first, like the outdoor drainage and the broken shower tiles and door, fix the storage issues in the kitchen next, and worry about the cosmetic issues last. Water issues are critical to stop or prevent, so that has to be fixed first. The kitchen storage problem affects everyone in the house on a daily basis and creates a major annoyance. The flooring and walls are nice-to-haves, and can wait. My 9 year old was pleased to see that Frugral Dad’s recommendations, and the other commenters, was similar to his. Good luck, and have patience with yourself and the projects!

  9. Don’t forget to consider that if you move you’re going to pay thousands of dollars to a realtor out of your equity.

  10. I would agree that it is worth it to stay. I will be the first to admit that we aren’t living in the home of my dreams. I thought this would be a temporary move, but the housing market in the Midwest is not the same as it is on the east coast, and so we have decided to stay. Each little update has made us feel more at peace with where we are. We started small, fresh coats of paint, faux tile on the bathroom floors, landscaping, a piece of art here and there and then we started making more of an investment (new a/c, new roof,new gutters). We still have a long ways to go, but each little detail helps make our house more of a home to me..

  11. Better late than never, but I’ll throw in my 2 cents. We bought a major remodel project in 1996 — this home was almost beyond hope: a 1890’s farmhouse that had been badly redone in the 70s and turned into a duplex later — but it came with a rare 5 acres that was very close to our city. We spent until 2001 fixing it up, ripping out whole walls and everything and sold it for enough to buy a really nice tract of 10 acres of land in a desirable area. We then built a new home ourselves from scratch using a lot of the knowledge we gained in the remodel. I know it stinks to live with shag carpet and paneling, but I will agree to start with the stuff that is really bugging you first and go on from there a little at a time. I had the same kitchen issues you do and to solve it I bought a really nice kitchen island that we eventually used in the new kitchen. That kept me kitchen-happy until we finally got around to getting the new kitchen done.

  12. I’m going to give the same advice about staying put. We bought a home last year, knew it needed fixed up and found out we bought a money pit. We couldn’t see all that was wrong with it because the woman who lived here was old, alone and had both health and financial problems. Stuff was everywhere and we could hardly walk through to see the place. She offered it at a very low price and we went in knowing that we would probably have to spend nearly the same amount to fix it. This was the only way we could afford to be homeowners. At the time I was limited as to my physical activity as I was scheduled for surgery a week after move in. My husband was still working out of town and is less than handy with tools of any sort. First thing was to pay a crew of three for working two days while I was at my job. They filled dumpster after dumpster and then cleaned. I started with the necessary stuff and had the tree limbs trimmed back off the roof and some really ugly bushes removed. Next came a new toilet and new floor (not just flooring) in both bathrooms as they were broken and leaking. Since the replacement toilets were low flow I got $200 back from the county. Next the central a/c had to be replaced, again before we could move in. Think July in Florida. I managed to find a place that did it on a 12 month, no interest basis and have that money saved ready to pay it off next month. All this got us into the house and now everything is being done of save it up and then pay in full basis. I’ve found a handyman in the community who fits our budget. Everyone has given you very good suggestions. As for replacing the bathroom door. I fixed two problems by simply just removing the door and using a shower curtain instead. Now I don’t have to try to keep those crummy runners clean! ;p Also, check out the freestanding pantry things by Rubbermaid and other brands. They’re not goregous but they can do while you take care of other priorities first. Start thinking outside the box. Declutter your linen closet and use some of that space to store canned goods. Check out Marla has helped a lot of us find more room than we thought possible in our homes. Good luck with it all.

  13. I know it may be hard and time cosuming, but I agree with staying and remodeling. The first thing you need to consider before you remodel or add an addition is if your neighborhood will support it. You do not want to have the nicest house in the neighborhood because you may not recover your money if you decide to sell. It sounds like you are ok there, but run the numbers and make sure. Also, please be careful about the advice on using people you do not know off Craigslist or any other site. There is a reason real plumbers and other tradesworkers are more expensive, they are licensed and insured!!! That cost money. You do not want to have someone come in a do the job wrong. First of all it can be dangerous, and you may end up spending way more money down the road on a job done wrong. As a general contractor in the insurance restoration business for many years, I have seen many sad stories ranging from electrical fires to poor plumbing causing slow leaks leading to mold and sickness. Plus, if something does go wrong who is going to pay for it? Not the $50.00 guy. Your homeowners insurance can also deny the claim (read your policy). Also, if is done wrong and you try to sell a home inspector will probably catch it and you would have to fix it anyway. Contact your local BBB or Home builder Association and get a reference for a licensed contractor in the trade you are using. It is not worth the safety to your family to save a few bucks in those few areas you need a professional. Most things you can do yourself without any problem.

  14. I also want to encourage you to stay. From the details of your situation it sounds like you have become emotionally drained from dealing with the repairs.

    Take a little vacation if you can, put a list together of things that need done, and then ask around to people you know for help. I say this because I am not handy at all but know plenty of people who are.

    My friends and neighbors have shared a few hours of their lives working with me on my fixer-upper in exchange for a home cooked meal, a cold pint of home-brew, and some fresh fruits and vegetables from our garden.

  15. Take everything in stride – do a little at a time – and you’ll be so proud of yourselves, and your home, when you finish. I rent a very old house, 2 bedrooms, and agreed to take it as is so I pay a very low rent. My kitchen is a huge room but I have the same few cabinets you do. I bought a metal 2-door, 5′ tall, cabinet at Lowe’s and use it as my pantry. Because of the ample space, a friend gave me a work-table he had built for himself, added a few shelves to it; I painted it and put it in the center of the room as an island. Like everyone said, ask friends, fellow church-members, check-out resale shops, and you’ll be surprised what you can come up with.
    Good Luck!

  16. Adding my voice to those who say to just do the work yourself. I’m not a handy person by nature, but 3 years after finding myself in a similar situation as yours, I’ve build my own cabinets; textured and painted my entire home interior; hung ceiling fans; installed floors, tubs, toilets, and sinks; and a million other things that I never imagined I could do.

    All it takes is some research, common sense, and money for tools and materials — you’ll save about 75% on ever job you do yourself (and the savings will increase once you acquire a decent tool collection and don’t have to keep buying more!)

    There are some things that might be better left to a professional (advanced plumbing, electrical, and concrete), but most home improvement can be done by anyone with the will to learn.

  17. As someone who has just finished a complete remodel of my duplex. 2 Kitchens, 2 bathrooms, floors and paint. Please let me say that the FHA has remodel loans for people like yourself. This program could be a godsend since it is a 20 year loan. So that is the money…

    But the materials, Please investigate the IKEA home kitchen planner.
    This little tool can really help you understand the option (for free) before investing in carpenters, plumbers and electricians.

    INSIST/REQUIRE workmans comp insurance and liscence and bonding from you contractors. Do not let ANYONE in who is not covered with these. This is a warning from someone who is still in a lawsuit over this…You will pay more for a reputable firm! You will be covered, and maybe they will show up every day for a week and actually finish the job. Please do not hesitate to remodel, just plan and save and just in case, think about renting a place to stay while the bathroom is ripped down to the studs for water damage and the kitchen is waiting for the electrical and plumbing inspections.
    Good luck

  18. I agree, it makes no sense to move, for 1 there is no more appealing place to move to that is affordable, and the improvements you want are cosmetic and modest in cost. We had to majorly remodel on our house. Maybe 50% was done the first year, another 25% next five years. It is 10 years later and there is still stuff on our list. My main regret was rushing a couple jobs at the beginning because of having to move in. Take your time, do it right, and make it your own. Good luck!
    (ps for our house we had to: change from duplex to single family home, get it completely rewired, completely redo both both bathrooms and the kitchen, tear down fake wood paneling and fix walls & ceilings (still a work in progress!), refinish wood floors, and take out old warm mornings and window acs for central air and heat. And last summer put in all new energy efficient windows.)

  19. I’ll cast another vote for staying put & fixing it up! My wife & I did this and couldn’t be happier with our home. We’ve redone nearly every room in the place, but now it’s truly OUR home – through & through!

    We just finished renovating our tiny master bath and it’s gorgeous!