Let’s answer the burning question you’re wondering right now: could the cost to tear down your house make your property more valuable? In a well-established neighborhood, a teardown may be your best bet.
How to Determine if the Cost to Tear Down a House is Feasible for You
Your property could be zoned for a three-story, 6 thousand square foot home. But right now, you’re looking at a ranch that couldn’t possibly fit your partner, the kiddos, and the pups. This ranch sits in the middle of the perfect school district with a price tag so low you have lots of wiggle room to make the home of your dreams. So what do you do? Ask yourself a few questions about the home you want to tear down for your new build:
- Is this home too small for my family and this neighborhood?
- Are the most important rooms and features out of date?
- Is the home an energy-guzzler because of inefficient appliances or a damaged roof?
- Do I have the budget and prefer entirely custom construction?
Have you answered mostly yeses? Then consider that your tear town has some built-in benefits like existing zoning. You already know your land is zoned for a single-family home, saving you time dealing with town permits, and we all know – time is money. Once you determine the specs on how much size you can build both out and up, you’ll also understand precisely how much value your property has. If that ranch is only costing you $350,000, but you could build a home that appraises over $1.5M, then that’s a couple of figures to consider. But we have more; it’s time to think about how to make the most of your new property’s value!
What Factors Increase Property Value
If you’ve already picked a neighborhood based on the schools, the proximity to work, and a great downtown, then the next step is to check the comps. It’s a fancy-sounding term for finding out what other homes around the neighborhood have sold for recently. If you’re building something comparable to what’s on the market, then understanding what it goes for will help you establish if those figures are profitable for you in the long run. Since homes are generally estimated by the square foot, if you noticed a comparable property has 4k square feet, and it sold for $1.3M, you can divide that price by the total square footage of the home, making it $325/square foot. Keep in mind, if your dream home doesn’t compare, then bringing in an expert to help you assess those features that make your home stand out is your best bet.
Plus, a considerable benefit your new build brings that mitigates the cost to tear down that house is simply that more modern homes appraise higher, to begin with. Usually, when you buy a home, you’re paying top dollar for the finishes and upgrades like a new roof or marble countertops. Rather than spend all of your money buying someone else’s finishes, you can guarantee fewer problems, less wear and tear, and no expiring appliance warranties by tearing down that older home in place of your new one.
Demolition and How to Save
The last figure we want to bring your attention to is the cost of your demolition, which can be around $15,000 based on location, size of the home, etc. But one fantastic way to save and even recoup money is by selling valuable items in the house, cabinets, light fixtures, flooring, crown molding, windows, wood doors, heating, and cooling units, and even metal – especially copper – can rake in quite a chunk of cash. Another great way to save money is by making tax-deductible donations to local organizations that can help people use furniture and items you don’t need.
This article will help you make the big decision to follow through with your tear down, but when you’re ready, have experts on your team who can help you navigate this detailed process.