Happy House Hacking Podcast EP 46: How to Choose Between a New or Old House

Link to full podcast episode here:

How to Choose Between New vs. Old Construction

When it comes to buying a home, one of the most fundamental questions you’ll face is: what is the right choice for you, a new build or an older property? This is the great debate of new vs. old construction, and there is no one-size-fits-all answer. Both types of homes offer distinct benefits and challenges, and what's right for you will depend on your personal preferences, financial situation, and long-term goals.

At The Schwaegerle Team, we believe that happy homeownership starts with a smart financial decision. On a recent episode of our Happy House Hacking podcast, we broke down the pros, cons, and hidden costs associated with both new construction and old construction to help you make an informed choice that works for you and your family.

New vs. Old Construction

The true cost of a home isn't just the purchase price, and it's a critical part of the new vs. old construction decision. Many buyers get caught off guard by the unexpected expenses of both types of properties. With an older home, you should be prepared for potential home renovation costs and home maintenance costs to address outdated systems and follow modern building codes. Conversely, a new build may come with hidden fees for upgrades and a higher tax bill. Exploring all costs and the pros and cons of each build can help you make the best decision for yourself and your situation. 

The Allure of New Construction

There is a natural draw to a brand-new home. As Camille Schwaegerle said, "You walk in, the house is a blank slate. It's staged so nicely." New construction offers a seamless, modern living experience that is hard to beat. But a perfect new home isn't without its potential pitfalls.

Pros of New Construction

When you buy a new home, you're not just getting a fresh coat of paint. You're getting a property built to modern standards with brand-new systems and materials. This peace of mind is one of the biggest benefits, among others, of new construction.

• Modern Design & Customization: New homes are built for today's lifestyles. They feature open-concept floor plans, high ceilings, and a sense of spaciousness that older homes often lack. You can also personalize your home from the ground up, picking everything from appliances to room layouts.
  
  
  
  
• Up-to-Date Systems & Energy Efficiency: New builds come with brand new systems—roof, electrical, plumbing, and HVAC. Additionally, as Owen Schwaegerle shared, they are far more energy efficient. New homes are built with better insulation, dual-pane windows, and modern systems that lead to lower monthly utility bills. 
  
  
• Current Building Codes: Another significant advantage of new construction is that the property is built to the latest building codes. This ensures the home is safe and compliant with modern building codes, including things like solar requirements in California.
  
  
• Warranties & Peace of Mind: Many new builds come with a builder's warranty, which can last anywhere from one to two years for minor issues and up to ten years for structural problems. This provides an invaluable safety net when buying a home.
  
  
• Less Hassle: A new home is "totally turnkey," requiring minimal effort on your part to move in and start living. What you're really paying for, as Camille noted, "...is less hassle and pretty much no maintenance for quite a long time." The minimal home maintenance costs are a major appeal when considering new vs. old construction.
  
  
  

Cons of New Construction

While the appeal of a brand new, move-in-ready home is undeniable, it's crucial to understand the trade-offs. The downsides often involve hidden costs, a loss of privacy, and a set of rules you might not expect. 

• Higher Base Prices & Hidden Costs: While the initial price may seem attractive, it's often just the beginning. The model home is typically the "best of the best," filled with expensive upgrades. Things like upgraded cabinetry and new bathroom finishes can add tens of thousands of dollars to the final price tag. 
  
  
• Smaller Lots & Less Privacy: New developments are often built at scale, with homes closer together on what we call "postage stamp lots." This can mean less privacy, minimal backyard space, and a lack of mature landscaping that you find in older neighborhoods.
  
  
• Construction Noise & Dust: If you are one of the first buyers in a new development, you can expect to live in a construction zone for months or even years. This means dealing with loud noises, dust, and traffic from early in the morning until the development is completed.
  
  
• HOA Rules & Regulations: Most new communities have homeowners association rules that can dictate everything from paint colors to where you can park. As Camille shared, we once came across a community where you "...couldn't park on the street overnight or even in your driveway overnight. You had to park in the garage." These homeowners association rules can significantly impact your lifestyle.
  
  
  

The Character of Old Construction

For many buyers, the appeal of an older home lies in its unique character, history, and charm. They offer a sense of personality that a modern build can’t replicate. But this charm can sometimes come with a price.

Pros of Old Construction

For many, the most appealing part of an older home is its location within an established community. Older neighborhoods often feature a sense of permanence that new developments lack. This, along with other positives, is a crucial distinction in the new vs. old construction debate. 

• Charm & Unique Character: Older homes often boast distinct architectural features, original hardwood floors, and a sense of history. As Owen described, these properties have "old world features," like brick or stained glass, that create a feeling of authentic craftsmanship and charm.
  
  
• Bigger Lots & Mature Landscaping: Homes from years ago were often built on larger plots of land. This provides more space for yards and gardens. Additionally, these properties benefit from mature landscaping, with old trees and established hedges that provide privacy and a sense of permanence.
  
  
• Prime Location: Older homes are typically located in established neighborhoods and desirable areas, often closer to a town's downtown core. This means more walkable amenities, less commuting, and proximity to the community's heart. The contrast with the outskirts where many new builds are located is a major part of the new vs. old construction decision.
  
  
• No HOA: Without a HOA, you have the freedom to make your own decisions about your property without needing permission from a board. You have the flexibility to change paint colors, add an addition, or build a fence without a long approval process.
  
  
• Potential for Equity: A dated older home can be a fantastic way to build "sweat equity." By renovating and updating the property, you can significantly increase its value. This is a great opportunity for those who are "handy" and enjoy doing this area of work.

Cons of Old Construction

We’ve all fallen in love with an old home's cozy, charming feel. But as we’ve learned from our own experiences—and with our clients—it’s not always as simple as it looks. The beautiful features you see on the surface can hide a host of costly issues lurking beneath. 

• Outdated Systems & High Maintenance: The primary drawback of an older home is its outdated systems. Old plumbing, electrical, and HVAC systems can lead to frequent and expensive repairs. We've seen homes with dangerous knob and tube wiring, galvanized pipes, and roofs that are at the end of their lifespan, all adding to home maintenance costs.
  
  
• Layout Limitations: Older homes often have segmented, compartmentalized layouts that don't suit modern living. Remodeling to create an open concept can be a complex and expensive project due to things like load-bearing walls and outdated materials. 
  
  
• Hidden Issues & Unknowns: With an older home, you're always buying the potential for surprises. A lack of proper building code standards from decades ago can lead to hidden problems that only a full remodel can uncover. Additionally, you may encounter materials like lead-based paint and asbestos, which add significant home renovation costs to any project. 
  
  
• Low Energy Efficiency: Older homes typically have poor insulation and single-pane windows, making them less energy-efficient. This inefficiency can cause much higher energy bills compared to a new, insulated home. The contrast in home energy efficiency is drastic between new vs. old construction.
  
  
  

Making the Right Choice for You

At the end of the day, the decision between new vs. old construction comes down to personal preference. Home energy efficiency and lower home maintenance costs are perks of new homes, but they can surprise you with hidden fees and restrictive homeowners association rules. Older homes are full of charm and a potential for equity, but may come with significant home renovation costs. Ultimately, the right choice is the one that aligns with your lifestyle and budget. 

At The Schwaegerle Team, we believe that the most powerful tool in buying a home is knowledge. For more guidance on your path to happy homeownership, be sure to tune into the rest of our Happy House Hacking podcast!