Jackson Hole Land Sales Series Part 3
Renovating or Rebuilding on Purchased Property.
By LintonBingle | June 30, 2016
Spurred by a strengthening economy and the rising popularity of Jackson Hole as a destination, the number of homes available for sale in Teton County has decreased significantly during the past three years. While overall inventory in Jackson Hole was 6 percent lower at the end of 2015 compared to the same point in 2014, the number of vacant land transactions rose by about 14 percent last year. As real estate buyers increasingly consider land for sale in Jackson Hole amid historic lows in home inventory, our new three-part series will explore the essential considerations of buying land and building a house near the Tetons
In part 1 of our Jackson Hole Land Sales Series, we explained how to find the ideal plot of land on which to build your new home. Part 2 outlined the steps for finding a local architect, builder and interior designer. But what if your best option in Jackson Hole’s sparse real estate market is not vacant land, but rather, an older home that is ripe for a remodel or rebuild?
The decision to purchase and renovate an older home – or to simply tear it down and rebuild on the property – can be driven by a dizzying array of factors, including cost, engineering, aesthetics, location and zoning advantages. But before making that decision, you must determine whether the existing structure is even sustainable. If so, can you work within the home’s shell to create the look and layout that you desire? A teardown and rebuild may be the smarter choice if the remodel would so extensive that it would cost nearly as much as a new home.
Explore Your Potential Remodel with a Structural Engineer
If you think that you can work with an existing home, or if you’re not completely sure, we recommend enlisting the services of a structural engineer. Jackson Hole engineering firms like Y2 Consultants can examine the home’s foundation, frame and underlying soils to determine whether they are workable for the long term, as well as whether your envisioned changes can be safely executed on the existing structure. In most cases, an addition of one or two areas to your home will cost less than a complete teardown and rebuild, but a structural engineer can help identify when those savings would be outweighed by a new home that is more energy efficient, structurally sound and easier to maintain.
Consult a Builder Experienced in Both Remodels and Rebuilds
If your family needs additional space, can a new living room be easily integrated along the side of the house without disrupting the floorplan? Will a new master bedroom above the first-floor bathroom deter from the home’s existing charm? Experienced Jackson Hole remodelers like Chad Grohne at Creative Building Solutions can help you answer these questions. While a simple facelift can transform the look of a home, your remodel could be a nonstarter if you’re seeking a completely different architecture.
Photo courtesy of Creative Building Solutions.
Justifying the Time, Effort and Cost of a Remodel
A significant remodel will likely produce more surprises than the relatively straightforward process of tearing down and building a completely new home. At the same time, you may feel more personally invested and rewarded by reviving and revamping the beauty of an older home. By keeping one eye on your personal needs and the other on lasting improvements to efficiency and structural integrity, you can complete a remodel that inspires passion while still making financial sense.
Take the example of Jackson natives Tom and Kristin Fay. Leading up to their wedding in 2015, Tom and Kristin saw the potential in a small, rundown home that was built on Hansen Street in East Jackson in 1925. While most other bidders wanted to teardown the home and build a larger residential or commercial space, the Fays purchased the property with a full-price offer and the intention to remodel within the existing 1,200-square-foot structure.
“We looked at newer homes in the area as well, but our budget was limited and we wanted something we could fix up,” said Kristin Fay, who used her experience and connections as lead interior designer at Trauner Fay Designs to guide their remodel. “For a home built in the 1920s, the foundation was in great shape and only needed to be re-enforced in a few areas.”
That said, purchasing the only home in East Jackson priced less than $500,000 at that time did come with its drawbacks. The seven-foot-high ceilings proved to be water damaged beyond the point of repair. Similarly, the interior walls were in rough shape, and the doors and windows would rattle and leak air.
Tom and Kristin's renovated living room with vaulted ceilings.
Though these problems led to a much more extensive remodel than the Fays had anticipated, the resulting solutions completely transformed the look, efficiency and expected longevity of the home. The 30-something couple created a bright, airy feel by tearing down the low ceilings, making way for a vaulted ceiling with a new supporting bridge beam. The interior walls were gutted to accommodate new spray-foam insulation and wiring. New exterior siding was also installed, and all doors and windows were replaced with new, energy-conserving models.
By prioritizing the rest of their project spend on key areas like their bathroom and kitchen, Tom and Kristin ended up paying less than the cost of building a similar home on vacant land. Perhaps most importantly, their new home is an ongoing source of pride and comfort for them.
“Since the house is smaller, we were able to do nice finishes and features throughout,” Kristin added. “We did some work on our own and made it special for us.”
Tom and Kristin's renovated bathroom and kitchen.
Ali and Sam Sehnert took a similar approach by purchasing another fixer-upper in East Jackson in 2012. Built in the 1960s, their two-level, 2,000-square-foot home had some unfortunate relics from those days, including shag carpeting on the walls, but it met their budget, and the couple could see the possibilities.
“We fell in love with the location of the house and its potential,” explained Ali Sehnert. “Honestly, when we initially walked through it, I could picture family holidays in the home and future kids playing in the yard.”
The Sehnerts quickly removed the shag carpeting and installed foam insulation in the walls to boost energy efficiency. While removing a defunct fireplace, an awkward mini-kitchen and an entryway wall, they found a crack in the foundation wall that would be a time-consuming fix, but fortunately not too costly.
BEFORE: The Sehnerts' downstairs living room, complete with shag carpeting on the walls.
AFTER: The Sehnerts' downstairs living room with new sheetrock and a new carpet.
With the first phase of their project largely focused on the downstairs, Ali and Sam had the walls sheetrocked, taped and mud-textured, complementing that look with fir wood grain trim. After leveling out the underlying concrete slab, they added a new carpet on the first level, as well as new flooring in the kitchen, entryway and stairs.
Even with a new gas range, dishwasher and peninsula for the kitchen, a sound-barrier mat for the downstairs ceiling, and several other changes, the Sehnerts are still running below the costs they would have reaped if building from scratch. They have also been able to rent out their first floor to tenants, generating extra income for the second half of their project upstairs.
“We couldn't afford to purchase a lot and then build what we wanted, so the remodel game was where we needed to focus,” noted Ali.
The Case for Teardown and Rebuild
The Fays and Sehnerts were fortunate to work with older foundations that had either remained intact or could be fixed at a reasonable cost, but this is not always the case with older Jackson Hole homes. Teton County did not establish a building department until the late 1970s, so the durability of older homes varies greatly depending on the skill and foresight of those who built them. Along the same lines, the county did not adopt a building code addressing the potential for earthquakes until the mid 1990s.
When these structural issues cannot be remedied economically by reinforcing the existing foundation or performing a seismic retrofit, a structural engineer will often deem a teardown and rebuild to be the more prudent option. Similarly, if the house is so dilapidated that its electrical and plumbing systems cannot be easily renovated to meet modern efficiency standards, it will likely be best to start over from scratch.
Location, Location, Location….
Location could also be a major factor in your decision. If the home is located in a popular Jackson Hole neighborhood, and it is valued at less than half the price of other homes in that neighborhood, then the extra investment in a new home (if you can afford it) can increase your property value far beyond its value with a remodeled version of the existing home.
For buyers searching within the town of Jackson, there are also many older homes that reside within the Auto-Urban Residential (AR) District, meaning that they can be torn down to make way for up to three separate residential units. If you are willing to take on the responsibilities of being a landlord, building three units on your property can help you recoup your construction costs with the resulting rental income. However, prospective landlords must keep in mind that these extra units can only be rented to long-term tenants for 31 days or longer.
A lot for sale in Jackson's AR zoning district.
Outside of town, the landscape on and around each property tends to loom large in buyers’ decisions. A mountain view in Wilson or an on-site creek in South Park can skyrocket the value of a property, but that value is greatly diminished if the home doesn’t accentuate those natural elements with, say an expansive window view or an inviting creekside patio. A teardown and rebuild can be the simplest way to accomplish these goals, especially if you are not thrilled with the existing architecture or the house is not ideally situated on the property.
By weighing these structural, financial and location-based factors against your family’s needs and vision, you can make a confident decision between remodeling an existing home or demolishing and building anew. No matter your choice, we encourage you to support the Jackson Hole community by donating outgoing fixtures, furnishings and building materials to the Teton Habitat Restore. To find the perfect property for your home project, check out our current Jackson Hole real estate listings.