Remodel or Build New: How the FEMA 50% Rule Factors in to Your Decision
You live in Florida, home to hurricanes, torrential downpours, and the occasional tornado. Let’s say your home sustained damage through one of Nature’s events and you need to make repairs.
Or, you may be considering home improvements just because you want them and it’s time to add those upgrades. Either way, the expenditures you’re prepared to make may require you to bring the entire home up to current standards for insurance purposes.
Here’s something important to know: There are times when remodeling or repairing doesn’t make as much sense as building new. So let’s look at a major factor affecting the remodel vs. build new options: the FEMA 50% rule.
Knowing the FEMA 50% rule
To best understand the FEMA rule, here’s how the Federal Emergency Management Agency (or FEMA) describes it: “If the cost of improvements or the cost to repair the damage exceeds 50 percent of the market value of the building, it must be brought up to current floodplain management standards.”
In other words, the existing building – i.e., your home — must meet the requirements for a new construction so that it complies with regulations that aim to prevent flood damage. So if your costs of rebuilding are high enough, you need to make sure your house is also above the flood level. Considering the effort that goes into meeting those requirements, we at LaBram think it makes financial sense for homeowners to build new on their lot.
Is your home affected?
To know whether your home meets the flood insurance standards, here’s one way to check. You may need to abide by the FEMA 50% rule if:
- Your house was built before December 31, 1974 or
- It was built prior to the date when a community had to participate in the National Flood Insurance Program
When planning on repairs, you can check your local county appraiser to get your home’s assessed value. In some cases, you may want to obtain a new property appraisal. We can advise on the best course of action. And before you embark on any expensive remodeling or repairs, be sure to know your home’s flood zone.
Build new with LaBram
As much as you love your old home, it may not make financial sense to make repairs when you can build a new one. The good news is that you get to stay where you want to live while spending your money wisely. If you’re in these circumstances or think you might be, we’d love to hear from you and help create the home that you want. Before starting any significant repairs or remodeling projects, get in touch with LaBram Homes.