What are the “major renovations” and the size of the addition that they expect to get for 200K?

They propose to redo the kitchen and add 400 sqft Great room, plus ensuite.

So a standard 150K master en suite, a 50K kitchen, and a 75K great room? Plus the costs of upgrading the systems and the while you're at it's? Like making the home accessible to actually stay there long term? Plus the septic, well, electrical service, lot grading and driveway/culvert redo?

200K is well in the rear view mirror. 400K is more like it by the time they are done.

Will the term "Happy Wife, Happy Life" help at all?

Well...it all depends.

--Has there been a thorough inspection of the existing foundation for proper condition?

--Does the existing site drain positively away from the existing house?

--Is the building site composed of expansive soils?

--Is there any evidence of structural or bug deterioration/infestation in floors, walls, ceilings or roofs?

--Is there any evidence of water leakage or damage in floors, walls, ceilings or roofs?

--Is the roof structually sound, and is the roofing is good condition for another 10+ years?

--Is the existing HVAC sound, working and sufficient for the house plus addition?

--Is the electrical/signal systems sound, working and sufficient capacity for the house plus addition?

--Is the water supply and waste systems sound, working and sufficient capacity for thouse plus addition?

--Have you checked into the planning, zoning and building hearings, permits and fees required?

--Do you plan to use an architect and engineer, or builder only, or do everything yourself?

These are just a few of the things to evaluate when considering a major renovation to an existing house.

Good luck on your project.

You forgot the other options:

- buy the old ranch, tear it down and build a new house on the lot. This is the main type of project in my area, because we don't have any new/raw land.

- add the remodel budget to your purchase budget, so you have a bigger purchase budget for a better/bigger house that doesn't need work.

I have often said there are no reliable rules-of-thumb in building design and construction and those who make them up are often doing a great disservice to inexperienced homeowners.

I've designed more renovation/additions than I have new houses. If I had to choose which one is more economically viable, I would say renovation/additions but it really does depend on the specifics of the situation especially how marketable the existing property is and how much equity you have in it.

I have found the issue that is most often the determining factor is the effect on the family of moving to another community and school district and if you can stay in the house during construction.

"I have read . . . family members want . . . They argue . . . "

Let me guess, you're being outnumbered. Certain members here on Houzz may be able to be bribed to comment in your favor.

If the desired location is only available by buying an existing property, the cost of building the new home does not matter. Location is very important and that is often the deciding factor. Another consideration is whether the existing living arrangements can continue during a renovation or new build. If the buyer will be paying for rental accommodation while building but living in the property during renovation, that could be a significant cost.

After they do the renovations, will the house in its location be worth $550k? If not, then it's not a good deal.

You need to figure things a little more. More depth for both the remodel and the build. Does the old ranch have a new roof, windows and what level of insulation and building sealing? When you build new the standards are current not 1960s.

Thank you all, lots of food for thought here. I will share your wise advice with the involved parties. They are just starting the process and of either building or renovating. Mark, as always, gotta love the humour Lol.

13% taxes??????? What is this on?? Where are you?

@robin. In Ontario Cdn, we pay 13% sales tax on Most goods. In the case of houses, there are rebates if the home is less than 450k, I believe. If Worthy is around, nay know more about this and explain better than me.

"After they do the renovations, will the house in its location be worth $550k? If not, then it's not a good deal."

T'ain't necessarily so. If you end up with the perfect house in the perfect location and that isn't otherwise obtainable in your market it could well be a good deal for you.

I doubt that we could sell our place for what we have in it, yet I am thrilled to have exactly the place I want to spend the rest of my life. Living with a poor compromise that pencils out as an economic "good deal" would not make me happy. I honestly couldn't care less what the place sells for after I'm gone; it's a completely irrelevant datum, not to mention that I'll never know.

There are more factors than money that go into a "good deal".

Other than the subjectivity of how much they love the locations, this is a math problem. A developer would create a "pro forma," which is a side by side cost comparison chart for each scenario. Once you do that, you'll get a sense of which path is cheaper or more expensive. Then you can argue out which way to go.

I tend to be fairly negative on major renovations, unless the home is of historic value. Not the same thing as changing out floors/fixtures, for example. The things to think about, detailed above by Virgil Carter. And then some!

HVAC and foundation, plus um- what really is going on behind those walls? Adding space means all of this and more can and probably will get very expensive. I saw so many properties, when first buying, that had so many mistakes. I really didn't want to pay top $$$$ for all those mistakes, which is what renovations too often bring.

I recently bought a property in a "woo-hoo" up-and-coming neighborhood. I was chasing a view, and eventually got it- end to end 2nd floor cityscape. To have attempted that with the existing house, plus add space (we all play the square foot game, city-center, Austin TX) would have been high $$$$, just to try to marry old with new.

Instead, my architect and GC gave me the elegant solution. We gave the existing house to a demolition guy. He jacked it up, carted it away- renovated it and placed it on other land. An affordable rental, and $$ in his pocket. For that, the rest of the demo- whole process costed me zero. Take out the out building, existing foundation, and now time for a one off custom build. Saved me thousands, and made way for exactly what I wanted. Shoot, sometimes you can donate to a Habitat for Humanity project. Then you also get awesome tax deduction.

Valuation? HA! Playing that "game" meant that I ended up with over $300K in instant equity. I'd do it again in a heartbeat.