Want to know when it’s no longer financially viable to renovate an old house?
Old houses aren’t perfect. Sure, they come with character. But they also come with old electrical wiring, rusty pipes, and systems that weren’t designed to handle how we live today. Updating these systems is the logical solution…
But
These costly renovations can run you thousands of dollars and won’t contribute anything to your return when it’s time to sell. For a lot of homeowners re-wiring or repiping their entire house just doesn’t make sense from a financial standpoint.
Eventually every homeowner reaches a point where they need to ask themselves if it’s truly worth spending $10K or more on improvements that won’t actually add to their home’s sale price. Or if there isn’t a better solution than throwing good money after bad.
Let’s dive into it.
What you’re going to learn:
- Why Rewiring and Repiping Are So Expensive
- When It Makes Sense To Just Sell As-Is
- Costs They Aren’t Telling You About
- Better Alternatives To Major Home Renovations
Why Rewiring and Repiping Are So Expensive
Rewiring a house is invasive, messy, and extremely expensive. The average cost to rewire your whole home ranges from $7,000 to $13,000.
Now let’s talk about plumbing.
Repiping your house isn’t much better. Swapping out every inch of old plumbing in your house will set you back $4,000 to $15,000. Labor costs alone are around 70% of your total bill because plumbers have to jackhammer through your walls, bust up your floors, and dig through your crawl space to replace every pipe.
And that leads to an important point…
These upgrades aren’t cosmetic. They don’t make your house look nicer. You can’t advertise “New Pipes!” or “New Electrical!” on your front lawn. Buyers expect your home to have functioning electricity and plumbing. You aren’t given a bonus at closing for having brand new updates.
Your $10,000+ renovation ends up being a giant waste that you can’t recoup when it’s time to sell.
Spending thousands of dollars on home upgrades that won’t add a penny to your sale price isn’t always the best financial decision. If you’re looking to sell quickly without touching a single pipe or wire, visit https://chicagocashhomebuyer.com/ to learn how you can skip the repairs and close fast.
When It Makes Sense To Just Sell As-Is
Let’s take a look at some actual data.
Per HomeAdvisor, new plumbing isn’t a luxury buyers are looking for. There’s simply zero return on investment when it comes to installing new pipes in your home.
That’s right. New plumbing is considered to be required maintenance along with electrical. If it works, great. If not, you’d better hire someone to fix it. However, your pipes got there.
Electrical is the same thing. Simply having new wiring doesn’t give you an advantage over other homes that just passed inspection. Both are expected to be in good working condition by today’s standards.
When do upgrades become nothing more than a money pit?
There are a few telltale signs.
- The cost of the upgrade will exceed 10% of your home’s value. ($15,000 upgrades on a $120,000 home? Really?)
- You have to upgrade multiple systems. Electrical and plumbing = $20k+
- Something else is wrong with your house, too. Another renovation, sneaky repairs?
These are just a few of the moments when it can be wiser to sell your home as-is rather than withhold your money on repairs you’ll never see the cost of again.
Costs They Aren’t Telling You About
You think repiping and rewiring costs $4-15k? You haven’t seen anything yet.
When companies tell you how much it’ll cost to rewire or repipe your home, they aren’t including everything.
Take drywall and wall repairs, for example. Electricians and plumbers have to break into your walls to access old pipes and wiring. Someone has to fix those holes after the project is done. Drywall repair can easily cost you another 25 to 30% on top of your project.
Permits and inspections? Another $50-$500 spent before you even start. Fail an inspection and now you owe more money.
There’s also the issue of asbestos and lead paint. If your home was built between 1930 and 1990, there’s a chance it contains these harmful substances.
Did you know that according to the NFPA, the average number of home fires attributed to electrical failure or malfunctions was 30,740 per year between 2014-2018?
Remediating asbestos or lead paint is necessary when working on older homes, but also costs you thousands of dollars.
Not only are the upfront costs for ripping out old plumbing and wiring scary high, but there are always going to be other costs you don’t find out about until after you commit to something.
Better Alternatives To Major Home Renovations
Rewiring your house or repiping your entire home is not something you have to do. But you’d better be sure it’s necessary before you break out the checkbook.
Partial upgrades might be an option. If a specific pipe is bad, replacing that section alone is far cheaper than handling an entire home re-pipe.
Partial electrical work is possible too. Upgrading your electrical panel or adding a single circuit won’t take out all your walls and costs significantly less than rewiring your entire home.
These smaller-scale upgrades are only doable if your home doesn’t need a full overhaul. You can’t just replace one pipe. Every. Single. One. Will have to be replaced if the plumbing under your house is shot.
But what if your house needs everything replaced?
Sell it.
Repairing a home or hiring someone to do it can easily cost $20k+. Homeowners are unlikely to ever see that kind of money back when they go to sell. Especially if the home isn’t considered high-end or in a prime location.
Cash buyers are prepared to buy homes in any condition. They have teams of contractors that can handle these expensive renovations at a price most homeowners would be hard pressed to beat on their own.
When you sell as-is, you also don’t have to worry about:
- Finding the right contractors
- Broken pipes/wiring during repairs
- Scheduling conflicts
- Cleaning up after contractors
- Inspections failing
- Permits
And don’t forget about the amount of time these renovations take. Wiring an entire home takes 1-2 weeks. Repiping can take up to 7 days just for the plumbing. That’s not even including drywall repairs/painting.
That’s a long time to live in a construction zone.
The Bottom Line
Old electrical wiring and plumbing are expensive to update. No one wants to live with these hazards, but when it comes down to your overall ROI these are things that should be considered before making any heavy decisions.
Overall financial cost of upgrading:
- Rewiring: $7,000 – $13,000
- Repiping: $4,000 – $15,000
Neither of these upgrades comes with any Return on Investment.
Hidden costs like drywall repair, permit fees, and asbestos testing can cost you even more.
It’s important to know when holding onto a home does you more financial harm than good. If your house needs new pipes and wiring, you might be better off cutting your losses and moving on.