When most people consider buying property for a new home, they either think about buying a home to move into or buying clear land on which to build what they want. But, there is a third option that may work out well for you: buying a home to demolish.
How can this home buying strategy work for you? And what should you know before deciding to do it? Here are a few answers.
Why Buy a Home You’re Going to Demolish?
Most people don’t plan to buy a piece of property with the express intention of destroying what’s built on it. But it does have its advantages in certain situations. For instance, if you focus on getting the right piece of property — the perfect location, excellent views, a neighborhood that meets all your needs — then it may be worth the extra work in order to have that property.
So-called “teardown houses” are generally pieces of real estate where the land holds pretty much all the value for you as a buyer. Usually, the home really can’t be salvaged because it’s very out of date, can’t be brought up to code, or would require too large an investment to renovate. It may have serious issues like mold, infestation, water damage, or extensive storm damage that make it unsafe for habitation.
As a result of these serious deficiencies, you may be able to get a great deal on property you’d otherwise pay a lot more for. It’s not an easy decision, of course, to buy with the intent of a total replacement. But if you can get an outdated, cheap home in an $800,000 neighborhood and then spend $300,000 demolishing it and building a new home that you love, you can save tremendous amounts of money.
What Should You Do First?
Before you put money down on a home you intend to demolish, make sure of a few things. First, be certain you can destroy the old buildings. Some neighborhoods or cities have restrictions for historical or zoning reasons, limiting what you can actually do to the home. You’ll also have utilities issues, permits, and possible abatement challenges.
Then, confirm that what you want to replace the structure with will be of sufficient value so as to make the extra effort and cost worth it. Demolition and reconstruction is a big undertaking and likely requires a longer time frame than just a renovation. You might experience personal and emotional costs and benefits if you start over.
Will you get enough out of it to make up for all that work? Ideally, you should aim for a goal of building a new home worth at least two or three times what you paid for the teardown property. And the new home should be in line with the rest of the neighborhood if you want to maintain that value.
Finally, make sure you can’t accomplish what you want through more conventional renovation methods. Is a large-scale remodel an option? If so, at what point is it no longer financially feasible? Is the home’s basic structure workable? Or does it have structural issues that could be unsafe or too outdated?
Once you tear down a home, you can’t go back — so be sure that it’s your best option, both physically and financially.
What Should You Do Next?
Do you think that a teardown might be the right move for your home purchase? No matter what stage of home shopping you’re in, consult with the demolition experts at Abbotts’ Construction Services, Inc., today. We can help you assess the costs, obstacles, and benefits you may find in order to bring your dream to life.