Whether you are contemplating renovating your current home versus buying a teardown or trying to decide what to do with a fixer-upper, the renovating vs demolishing question is rarely clear cut. The cost of one over the other varies from case to case. Here are a few factors that you should take into account to determine when to renovate and when to demolish.
When to Renovate
Preserving Vintage Details
If your home has historical attributes or original details that you want to keep, it may be wise to renovate. Vintage features like solid-core doors, arched doorways or marble windowsills are hard to come by today and often can’t be replaced by new construction.
Historic District Restrictions
If you live in a town or neighborhood that is designated as a historic district you may not be allowed to demolish and may be forced to renovate. Many older communities have restrictions in place to preserve historical buildings and protect the character of the town. In some places, you will need to get special permission from the local historic preservation commission to demolish and rebuild. Those can often take much longer to obtain than renovation permits and aren’t worth the trouble.
Considerable Cost Savings
If the scope of the renovation is limited enough that it is considerably more cost effective, renovating is probably your best option. Keep in mind that renovation costs are almost always higher than you anticipate due to unexpected issues like electrical or plumbing problems, mold or structural defects. You should leave some extra room in your budget for unforeseen expenses.
When to Demolish
Major Structural Issues
If the home has major structural issues it is almost always smarter to demolish the home and completely start over. Things like crumbling foundations, mold, pest infestations, or cracks in the walls are typically more expensive to repair. Water damage from a flooded basement or a leaking roof also is a major issue that is often not worth fixing.
Cost and Potential Appreciation
If the investment in new construction increases the value of the home enough to outweigh the demolition costs, then demolition is most likely your best bet. Demolition typically costs about $8,000 to $15,000 depending on the location and the size of the property. Generally, it is worth it to tear down the home if the new house can be valued two to three times as much as the original home. The price of the newly built home largely depends on the location and the current prices in that market. So it is important to know the sales prices for comparable homes in the neighborhood and set your budget within those parameters.
NAIHBR is a not-for-profit trade association brings together homebuilders, contractors, real estate professionals, lenders and suppliers to promote development of new construction and home renovations. Our members have a strong interest in building value in their local communities. For more information or to join NAIHBR contact us at 855-733-8100.