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Renovate Or Rebuild —  8 Questions To Ask Yourself

Posted by Luke Hancock

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Nov 23, 2015 11:27:13 AM

renovate-or-rebuild-newSometimes a house needs a lot of work.

Seriously, A LOT of work.

Maybe it’s your house (sorry). You might have outgrown it, but you love your neighborhood and don’t want to move. Maybe you’re a house flipper who got a great deal on a fixer-upper and you’re looking for a big profit.

Do you renovate or do you tear the thing down and start from scratch?

We’re not gonna lie — either way, be prepared for some turmoil. No home-cooked meals for a while. Dust everywhere. At least two missing toothbrushes. Serious threats to your sanity.

And that’s if everything goes perfectly.

Which way to go? Here are a few factors to consider when deciding between renovate or rebuild.

Is The House A Good Candidate For Tear Down?

Potential tear downs are typically outdated houses in popular, sought-after neighborhoods. Maybe they’re much smaller than average. The kitchen might be so old the last person who cooked in it had a beehive hairdo. They might have serious structural issues that make a renovation too costly.

All this means they tend to be priced below average for their street or neighborhood and often sit unsold longer than others.

Is The House Beyond Repair?

looking at neighborhood property value comps will help you decide between renovate or rebuildSometimes even a seasoned remodeler just says, “Ugh.”

Older homes can have so many problems, it’s just not financially feasible to repair them. Heavy infestations of mold or pests. Extensive water damage undermining the foundation or footings. Roof damage from wind or rot.

Some houses have interior layouts that are too tough to rearrange for today’s lifestyles.

Will The Eventual Value Make It Worth It?

Real estate experts say a tear down should be able to support a new house that, when complete, is valued at two to three times the price of the tear down house when you bought it.

If you can nab an older, outdated house in a great location for $200,000, then sell it later for $400,000 to $600,000, that’s a good candidate. Start by looking at the comparable property values — “comps” — of surrounding houses to get a better idea.

Do You Want All The Modern Bells And Whistles?

Think about what’s important to you, or to your potential buyers.

Do you want a home that’s energy efficient, from windows to doors to kitchen appliances? Wired for all the latest electronics? Contemporary room layouts?

By the time you update an older house with all those bells and whistles, it might be cheaper to tear it down and build from scratch.

Are There Local Restrictions That Might Limit You?

local restrictions are a factor to consider when deciding between remodel or rebuild

The answer is probably yes.

Lots of older communities in great locations have land-use rules and codes designed to protect the existing character of the neighborhood or village.

Sometimes historic preservation districts ban most tear downs or require that any new construction is similar in size and style to the other homes around it.

Maybe your house is 2,400 square feet and you hope to replace it with a 4,000-square foot home. Zoning laws may not allow that.

The rules might make the decision for you. Check with your municipality early in the process to avoid wasted effort and big disappointment.

Is Financing Too Complicated?

 financing is a factor to consider when deciding between renovate or rebuildExperts say financing is definitely more complicated when you do a tear down.

First you’ve got the cost of the existing house. Then the demolition expenses. And finally you need long-term mortgage financing.

Demolition costs vary with the size and location of the tear down property, but generally range anywhere from $8,000 to $15,000.

You may be able to get a “construction-to-permanent” loan that provides you funds for the building phase and converts to a long-term mortgage once construction is complete.

Experts say the best plan is to look for a package deal — a single loan transaction, based on the estimated value of the new home after the tear down and construction, with periodic draws to finance the building phase, followed by an automatic permanent long-term mortgage.

Will The Renovations Cost More Than A New House?

Renovations often cost more per square foot than new construction.

Working around older structures can be difficult and expensive. There are often challenges with plumbing and heating systems.

With a new house, you’re starting from scratch. You can put the plumbing and electrical exactly where you want them, rather than working around what’s already there.

Once renovations start exceeding $450,000 or $500,000, homeowners should start to consider tearing down and rebuilding.

You can build a brand new house for that.

Does The House Have A Soul Worth Saving?

Sometimes, you go with your gut.

Maybe you’ve lived in this house for decades. You’ve raised your kids here. The memories are part of your soul — and your house’s soul, too.

If the house is structurally sound, with architectural details that are hard — or expensive — to replicate, nobody will blame you for choosing to renovate.

Either Way, You’ll Need To Rent A Dumpster

renting a dumpster is the right idea for any home renovation project

So, renovate or rebuild? Whether you launch into a major renovation or tear down the house and rebuild, you’re looking at a lot of messy debris.

Time to rent a Bin There Dump That dumpster.

We offer 4-yard, 10-yard, 14-yard and 20-yard dumpster sizes, so there’s a size for every job. If you have a really huge job, we can pair larger dumpsters together to accommodate 30 or 40 yards of material.

Is your house in a snug spot? Older homes often are. No problem. Our dumpsters are all designed to be residential friendly —  we can fit down narrow city streets and easily deliver your dumpster rental into your skinny driveway.

When the time comes, find a dumpster operator near you.

Find out EVERYTHING you need to know about renting a dumpster bin.

Images: Demolition, Dumpster in alley, Historic district, Loans sign, Game pieces

Topics: Home Renovation