Termites Forced a Full Gut Reno on an 800-Square-Foot Home

Last updated: October 28, 2026

A planned light renovation became a full gut renovation when contractors found termites and faulty wiring in an 800-square-foot house in Asheville, North Carolina. Artist Morgan Purdy ultimately spent $120,000 and took out another loan.

The 1962 property was originally purchased as a potential long-term rental. Its renovation removed walls and original carpet, revealing hardwood floors. What began as an investment project became a home Purdy decided to keep.

At a glance

• Apartment Therapy reported that Purdy bought the Asheville house three years before the published house tour.
• The 800-square-foot property was built in 1962 and was initially planned for light renovation and long-term rental use.
• Contractors found termites in the floor and electrical fires behind drywall.
• Purdy took out another loan and spent $120,000 on a full gut renovation.
• The project changed her plans: she rented out her other property and lived in the renovated house.

Where the cost surprise came from

This was not a cosmetic budget miss. Termites affected the floor, while faulty wiring and electrical fires created problems behind drywall. Both discoveries undermined the original plan for limited improvements.

The spending figure also reflects an unusually broad intervention in a very small property. Dividing $120,000 by 800 square feet produces $150 per square foot, but that number should not be treated as a market benchmark. The project combined major building work, electrical work and customized design in a house that did not initially suit Purdy’s vision.

The more useful lesson concerns assumptions. A buyer who plans cosmetic updates or a rental conversion may be prepared for a limited budget, not for concealed conditions that require the building to be opened up. Once termites and electrical fires emerged, the decision was no longer simply how much to spend on finishes. It was whether to proceed, borrow more, change the intended use or walk away.

Purdy chose to proceed. She took out another loan and turned the property into a full gut renovation. Removing some walls also created an opportunity: original 1960s carpet came up to reveal hardwood floors. That benefit became visible only because the renovation expanded beyond its original scope.

Why the investment plan changed

Purdy had planned to renovate the house lightly and turn it into a long-term rental. The discoveries changed both the amount of capital required and the purpose of the property.

That distinction matters because renovation and investment are not the same objective. A rental or resale plan is judged by expected income, future sale value, financing costs and risk. A personal residence can also have value that does not appear in a rent calculation. Purdy ultimately rented out her other place and lived in the renovated house, later saying she knew she would never leave.

Her decision should not be presented as proof that the renovation produced a stronger financial return. Apartment Therapy did not report a sale price, rental income for the Asheville property, carrying costs or appreciation. The documented result was personal: she completed the work, found a home that fit her and stayed for three years.

For property investors, the trade-off is equally clear. Someone who wants income or appreciation must test whether the post-renovation numbers still work after the additional loan and work. Someone who wants a home can evaluate the renovation through the value of living there. Mixing the two calculations can make an emotional decision look like a guaranteed investment win.

A decision checklist for buyers

Before committing to a light renovation plan, ask:

• Have qualified contractors documented the termites, electrical fires or other concealed conditions in writing?
• Does the revised scope include the structure, electrical system, walls, floors and finishes affected by those findings?
• What is the complete revised estimate, including work that was not visible before demolition?
• Would the additional loan increase the project’s interest expense or reduce the return the property needs to deliver?
• Does the original rental, resale or personal-use plan still make sense after the renovation?
• What would repair, sale, continued renovation and walking away each cost?
• Which findings could affect the property after the work is finished?

The point is not to predict a renovation will always become a gut renovation. It is to prevent a limited budget from standing in for full knowledge of the property. Clear findings and a revised scope give the buyer a better basis for deciding whether the capital is justified.

What to watch next

For this property, the remaining questions are financial rather than decorative. The $120,000 investment must be considered alongside the cost of continued ownership and the possibility of returning to a rental plan. Any future sale would need to be evaluated separately because the reported figures do not establish a gain.

For investors considering similar small properties, the indicators to watch are inspection findings, contractor scopes, changes to the loan and any eventual rental or sale results. The key is to preserve the original return case rather than replace it with post-renovation optimism.

Purdy’s experience shows that a blank canvas can be a benefit, but only when the budget can survive the discovery phase. In this case, the new floor plan and hardwood floors came with a loan and a change in strategy. The renovation succeeded on its own terms; whether it works as an investment depends on numbers the house tour did not provide.

Key takeaways

• Termites and electrical faults can turn a light refurbishment into a full gut renovation, sharply changing capital needs.
• The reported $120,000 cost equals $150 per square foot, but the figure is project-specific rather than a market benchmark.
• A renovation plan should be recalculated after concealed conditions are documented and the project scope changes.
• Investors should preserve the original return case, while personal owners may reasonably value a home differently from an income-producing property.