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Real Estate Tools | Buying | Selling

Buy a New Home or an Existing One?

You have a finite budget within which to purchase and live in your next home. Do you spend our money on a brand new house (perhaps more expensive, but including everything you want and need), or do you select an existing home that's not-quite-perfect, and remodel, repair and/or redecorate?

As you narrow your choices to purchase/remodel an older home or build a new one, consider this: lumber prices increased sharply during the 1990s, making new homes less affordable. But does emptying your wallet on home improvements make sense in the long run? How much will you actually recoup? According to Remodeling magazine, updating and remodeling kitchens and baths add the most value to a home. In some markets, remodeling projects will return more than 100 percent of the cost, if the home is sold within a year; if the home is kept longer than one year, returns should increase. Here are some ballpark costs for popular remodeling projects:

Minor Kitchen Remodel

Job Cost: $8,507

Replace cabinet doors, oven and cooktop, laminate countertops, sink, faucet and floor, and repaint. Resale Value: $8,030

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Major Kitchen Remodel

Job Cost: $21,262

Redesign kitchen, replacing all of the above, plus built-in microwave, custom lighting, island. Resale Value: $19,190

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Bathroom Addition

Job Cost: $11,645

Add a second bath to a house with 1 or 1.5 baths; include ceramic tile and linen closet. Resale Value: $10,593

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New Master Suite

Job Cost: $36,472

Add a 24-by-16 master suite with walk-in closet, whirlpool tub, separate shower. Resale Value: $30,350

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Attic Bedroom

Job Cost: $22,840

Convert unfinished attic space with bedroom and shower/bath. Resale Value: $19,084

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Two-Story Addition

Job Cost: $55,687

First-floor family room and second-floor bedroom with full bath Resale Value: $46,236

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Family Room Addition

Job Cost: $31,846

Add a 16-by-25 room with skylights, hardwood tongue-and-groove floor, fireplace. Resale Value: $26,483

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Bathroom Remodel

Job Cost: $8,423

Update existing bath with new tub, toilet, vanity, medicine cabinet, lighting, tile. Resale Value: $6,480

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Replace Windows

Job Cost: $6,112

10 new 3-by-5 ALUMNinum-clad windows with trim. Resale Value: $4,536

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Replace Siding

Job Cost: $5,458

1,250 square feet of new vinyl or ALUMNinum siding and trim. Resale Value: $3,983

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Deck Addition

Job Cost: $6,172

16-by-20 deck of pressure-treated pine, including built-in bench, railings, and planter. Resale Value: $4,459

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Home Office

Job Cost: $8,103

Convert existing room into office with custom cabinetry and rewiring for electronic equipment. Resale Value: $5,423

Something else you might want to consider before you build or buy your next home: a consistent trend in recent years indicates that home prices are increasing more quickly than inflation in most areas of the country, including Georgia. Whichever choice you make, home ownership remains a strong investment - and home improvement a good reinvestment - of your financial resources.