is cheaper to tear down or renovate extensively?

[Anonymous]

I know there are many, many variables, but: I've been looking for a house in East Bethesda for a year. A house we can afford is tiny (under 1,000 square feet); has the living area and bathroom in the basement; and two teeny bedrooms and a cute, hobbit-sized kitchen on the main floor.

I dream of a Cape Cod house with a porch. They all seem to cost over a million dollars in this lovely neighborhood.
Question: Is it cheaper to buy the house we can afford and extensively renovate it--I can't even imagine how, except by adding a top floor and gutting what's inside now? And I still would not have my pretty Cape house.

OR--buy it and tear it down and build a new house that I love?
I might come into an inheritance soon...so maybe I could afford to do that, but I'd like to know which makes more sense, financially.

[Anonymous]

We tore down the above ground house but kept the foundation. After pricing out all the options this was the cheapest and the house looks great. Digging out estimate was at least 50k, and we just don't use the basement as much as the rest of the house.

[Anonymous]

Usually cheaper to tear down and start over unless you are not adding on and just renovating the interior.

[Anonymous]

We're adding on - we were quoted $400K to tear down, but $250K to add on what we wanted. Granted, we are not adding on a huge amount, but increasing the size of our house by 1/3, versus building something that takes up the whole lot.

[Anonymous]

Anonymous wrote:We tore down the above ground house but kept the foundation. After pricing out all the options this was the cheapest and the house looks great. Digging out estimate was at least 50k, and we just don't use the basement as much as the rest of the house.

Will be difficult to sell.

[Anonymous]

We did a whole house renovation, so added on three levels and reconfigured the space entirely on the main floor. It was just under 500K to renovate and would have been about 600-650k to tear down.

We effectively kept the same equity in the house or perhaps increased it a bit. We had lived in the house for some years. Very happy with the result.

[Anonymous]

Tearing down is cheaper square footage wise, but i like our renovation better.
We have half add-on addition (with many issues) and half renovated old house.

[Anonymous]

Anonymous wrote:

Anonymous wrote:We tore down the above ground house but kept the foundation. After pricing out all the options this was the cheapest and the house looks great. Digging out estimate was at least 50k, and we just don't use the basement as much as the rest of the house.

Will be difficult to sell.

If everything above foundation is new, does not the house listed as new build? I have seen that in many listings? Why would it be hard to sell and how would a buyer even know?

[Anonymous]

You should explore the rules and repercussions for your property tax bill, and factor that in.

[Anonymous]

We had a major renovation - complete gut job. Discussed with the contractor whether to teardown-rebuild instead, and he warned that the cost would be at least 50% higher to do that. His comment was that when people say it's cheaper to teardown-rebuild, they're assuming teardown-rebuild prices from outside of DC, where the labor is cheaper and the finishes are less expensive. If the basic structure of the house if solid, you'd be foolish not to take advantage of that basic structure, he said.

[Anonymous]

$500k to gut renovate existing house, and do 2 story addition. Could have rebuilt much bigger house for only slightly more, but we felt the quality would have been way worse in a new build at that price point.

[Anonymous]

Anonymous wrote:We had a major renovation - complete gut job. Discussed with the contractor whether to teardown-rebuild instead, and he warned that the cost would be at least 50% higher to do that. His comment was that when people say it's cheaper to teardown-rebuild, they're assuming teardown-rebuild prices from outside of DC, where the labor is cheaper and the finishes are less expensive. If the basic structure of the house if solid, you'd be foolish not to take advantage of that basic structure, he said.

Gut job can make sense. It's once you start tacking on additions or second stories to an 80 year old foundation that the calculus gets fuzzy. Using existing structure and just tearing down to studs would be cheaper. Not sure how it would work with plaster walls, lead paint, and asbestos removal -- environmental management without tearing down can add on $$$ cost.

[Anonymous]

Anonymous wrote:$500k to gut renovate existing house, and do 2 story addition. Could have rebuilt much bigger house for only slightly more, but we felt the quality would have been way worse in a new build at that price point.

But you would likely have a higher resale value.

[Anonymous]

Anonymous wrote:

Anonymous wrote:$500k to gut renovate existing house, and do 2 story addition. Could have rebuilt much bigger house for only slightly more, but we felt the quality would have been way worse in a new build at that price point.

But you would likely have a higher resale value.

That is true but we bought our house at a very good price, so still would make money on our renovated house. Since we plan to stay in this house for many years, we chose to renovate it to our liking while keeping the older "bones" of the house which we love. It would have been near impossible to build a new build that's good quality and had all the details of our older home (hardwood floors throughout, arched doorways, crown molding) at a price point slightly higher than our renovation costs. For our familiar, a a nice quality house that we really like was more important than having a lesser quality new build, even if that meant sacrificing how much we may make in resale.

[Anonymous]

We have had two friends - both contractors but neither would be our builder - say that for the space we want it would be cheaper and faster to tear down our house and build new. I am waivering as what we have is super cute (circa 1940 ~1900sf) but loving the idea of all new everything - eventual house will have just under 4000sf