Should You Remodel Or Tear Down And Rebuild?

Whether you’re considering buying a fixer upper or already own a house that could use a little TLC, you may have wondered if it’s worth renovating or if you should just tear down and rebuild. At first glance the pros and cons probably seem obvious. Remodeling might seem more affordable and less extreme while tearing down and rebuilding would provide you with a brand new home from the foundation to its finishes.

The question is: What route do you take? Before you make this pivotal decision, there are a few things you need to think about first.

Tear downs happen all the time. At Roberts Construction Company, we’ve been involved in more than a few with our clients. Yet in many instances we might prefer to remodel, especially when the house is part of a neighborhood’s character.

But that’s not always feasible. Here are some of the things we learned (some technical, some emotional) that might help you to decide when to “renovate” and when to “detonate.” 

Look at the Character of the Neighborhood and Check Property Values

Razing a house only makes sense monetarily if home prices in the area are stable or on the rise. Building the most costly house on the street isn’t a great idea in a neighborhood that’s declining. If that’s the neighborhood you really want to be in though, the best choice is to renovate rather than build new.

But, in a steady or growing area, a rebuild might be the thing to do. A couple of the houses we helped tear down were the misfits of the neighborhood and we think we did everyone a service by building them something that suited the area better and added value.

The opposite is true too. When a house fits a neighborhood well, when it’s an integral piece of the architectural composition, it’s not usually a prospect for leveling unless it’s falling down (and maybe not even then). You have accountability to the community that goes beyond your property lines.

Is a Rebuild Allowed in Your Area?

Ripping down a house and building a new one might not even be permitted in your particular area. Before making any plans, you should call the municipality and find out what the rules are surrounding rebuilds. Some areas don’t allow some types of properties in certain locales to be torn down, especially those that are considered historical or of a certain age. Most have setback requirements that limit the area where you can build, which can make it difficult to expand an existing house the way you want.

Building a new home in a very old neighborhood will likely change the look and feel on the street it sits on, and the city planning board might have a problem with that. Make sure you check with the local government office to find out what the rules are when it comes to tearing down homes in favor of new ones.

Are the “Bones” of the Home in Decent Shape?

Sometimes the existing structure does not merit restoration. If you are contemplating renovating the home, make sure that it’s got a sturdy foundation and structure first. If the bones are still strong then renovating might work out in your favor.

On the flip side, a home that’s resting on an impaired foundation or frail structure might not be a candidate for a renovation. Large cracks in the foundation walls, tilting of the floors, sagging ceilings, and water damage are all indicators that the home might not be in decent structural shape. In this case, you might be better off tearing the place down and building a more structurally sound home. It’s always a good idea to seek out engineering help for a structural assessment or potential structural issues.

Will You Be Sacrificing Your Home’s Charm by Tearing it Down?

Certain architectural features from old homes aren’t typically found in new construction. Arched doorways, solid wood doors and plastic molding are characteristics that you’ll have a hard time finding in modern architecture. If it’s important for you to retain the original features of the home, then renovating is probably the way to go if the structure has not been compromised.

Have There Been Any Previous Renovations?

Old houses can have a long history of renovations, additions, and repairs, some of which may not have been completed as well as the original.

Sometimes these alterations enhance the house, but oftentimes they subtract from it. Many times solid older homes are “renovated” with unsafe framing, cheap finishes, and poorly designed additions that don’t complement the original structure. You’re going to have to tear out and replace the bad work anyway. If the house is in all other respects sound, this shouldn’t be a major problem, just add it to your list.

For poorly constructed or poorly designed additions, think about a partial demolition.

Is Your Home Actually Well-Suited for a Remodel?

This is quite frankly the biggest factor in deciding to tear down or renovate. Some homes are just not suited for remodeling. Possibly it’s a tight site with no options to expand, or maybe the house is appealing, yet the spaces are all awkward and difficult to change without gutting everything and ripping out the history and charm. Or sometimes a house is just best left alone and the hard question that comes along is how do you live in a house that isn’t right for you, or why?

In a situation like this, we often find the clients love their location, like (not love) their house and are insistent as to a different layout or configuration. Do we tear down a perfectly reasonable house that doesn’t harmonize with their needs at all and build an outstanding house in its place that perfectly suits their needs and is in a location they love? Or, do they move and hope for the best? In a real estate market as competitive and tight as this one, the reality is that if you find a great location, then you might be better off keeping the lot, tearing down the home, and building a house that better fits your needs and tastes. It is a nuanced and thorny discussion, but at Renew Urban we can help guide through the questions that come up.

Is There a Neighborhood Design Review Requirement?

In many neighborhoods, proposed new homes are subject to design review. The existing house might not be exactly what you wanted, but if you tear it down and start over, are you willing to design your new home to meet the neighborhood’s regulations?

If review guidelines are stringent you might consider keeping the house and remodeling the interior, keeping the exterior untouched, so that you won’t run afoul of the review board.

In historic neighborhoods, design directives often make getting a demolition permit extremely difficult if not impossible, a good reason to work with the home that is already there.

How Sustainable Is Either Approach?

Whenever we look at a project, we evaluate how we can improve its sustainable aspects. Older homes have considerable embodied energy that has gone into fashioning the building components. Resources don’t need to be removed from the earth because it has already been done. That said, older homes can have a myriad of issues such that they can’t operate as well as a new home without serious and extensive work. A new house with meticulous detailing and appropriate materials can be exceedingly sustainable, healthy, and comforting to live in. Deciding what is most important to you and your family is a key factor in your decision.

What Are the Costs Associated with Both?

Generally speaking, building a new house is less expensive than doing an extensive whole house remodel if you’re looking at numerous additions. Where it gets knotty is when you’re not adding on, or you’re only doing a remodel to most, not all rooms. If we find that a design requires us to touch every room and tear apart the exterior walls to add on, then from a cost perspective you should probably consider a tear down. Having said that, if the remodel is more reasonable, tearing down might be total overkill.

Call Your Mortgage Lender.

Unless your property is free and clear from all liens and encumbrances, your mortgage is secured to the structure. Your lender has an interest in the home itself, so you can’t unilaterally destroy the lender’s security without permission. 

If you’re considering a tear down here is what you need to know about financing. Financing a tear down is more complex than a standard mortgage loan because the process involves destroying part of the loan collateral, the house. In addition to verifying your ability to repay, a lender will want to see plans for the new house and know who your builder will be. In order to  get a loan, the value of the property and the new home must meet the lender’s standards.

To cover the costs of demolition and rebuilding, tear down clients need to use a construction loan that will roll over into a standard mortgage upon completion of construction. These are sometimes called “one-time close” loans because you don’t have separate closings for the construction and mortgage loans. We cannot emphasize enough that if you do not own your property free and clear you must speak to your lender and arrange new financing.

Will the Resale Value Make It Worth It?

Have you checked to see what your return would be based on a renovation versus a rebuild? You’ll want to assess the cost of the project compared to how much you could realistically sell for in the future. Speak with an experienced real estate agent to find out how much your home is currently worth versus how much it will be valued at after either renovating or rebuilding it.

So What Do You Do?

In the end, there isn’t one magic formula for this question. Every single project has its pros and cons. At Renew Urban we can work with you to make a decision matrix to help calibrate the factors and make the best decision. Every project is unique and nowhere is that more true than when choosing whether to demolish or renovate an existing house. To make sure you make the right decision, speak to experienced professionals to go over the costs and work involved to help you decide.

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