Is Tearing Down a House and Rebuilding a Cost-Effective Strategy?

by Devra Zandell 06/09/2021

Knowing whether to tear down an old or damaged house and rebuild is not something that cannot be decided in a vacuum. The existing structure will likely present as a mixed bag of pros and cons. Before making a decision solely based on perceived cost, consider digging deeper into the facts.

How Has The Existing Structure Been Impacted?

An experienced contractor may have the savvy to review the house's structural elements and recognize telltale signs it isn't safe. Sagging beams, rotting floorboards and a cracked foundation indicate rehabilitation is not on the table. That's largely because replacing those elements may require more money and incur excessive labor costs than starting fresh.

Modestly compromised buildings tend to fall into a gray area. For example, if the roof and partitions appear intact, maybe new beams and buttressing floor joists would prove cost-effective. An experienced builder can provide an estimate for this aspect of the project.

It's important to understand that a construction professional can only arrive at an estimate based on prevailing material and labor costs. Unanticipated problems hidden behind walls and under floors could increase the cost of rehabilitation.

Rebuilding Triggers New Construction Building Regulations

Remodeling and rebuilding remain vastly different types of construction. Older homes do not necessarily have to conform to many of the standardized regulations crafted in recent years. Door widths, number of exits and things like tying smoke alarms into the electrical system may prove optional when remodeling.

Beyond the seemingly small nuances of modern building codes, major elements such as roofs, foundations and septic systems could dramatically increase the price of new construction. For example, imagine the property's well and septic system are only 90 feet apart and the new code requires 100 feet. The cost of excavation and reinstallation could prove prohibitive.

These are reasons to consider the cost of the rebuild, investigate how new regulations could be triggered and what they cost. Make sure you are satisfied with the price tag of a modern rebuild before swinging a sledgehammer.

Knowing When a House Needs to Be Demolished & Rebuilt

The decision-making process requires hard facts and an understanding of potentially rising costs to make an educated guess. S situations absolutely require a demolition crew. Obvious ones include a building that is teetering or roof holes that have allowed years of rain to pour through. Even seemingly sound buildings might need toppling if your investigative team of home inspectors finds any of the following:

      • Termites thriving in or around the structure
    • Mold found behind walls or under floorboards
    • Lead paint prevalent in exterior or interior
    • Asbestos materials discovered

    Another determining factor stems from the resale value estimate. A blighted small single-family home may not generate the increased value necessary to earn a substantial return on investment after rehabilitation. If it appears renovating an existing home results in a financial loss, it may be in your best interest to knock it down and build a profitable new one.

About the Author
Author

Devra Zandell

 Devra Zandell  is known for her positive energy and enthusiasm as a full time Realtor in the South Bay.  After having a success in previous business ventures, she have been passionate about helping people buy and sell homes for over 16 years. Devra is originally from New Jersey and she volunteers with Shriners Children Hospital & Project Needs here in the South Bay to
help give food and clothing to those who need.