When your home (or your rental property) begins to show signs of wear and tear, you’re often faced with making a few, rather complicated decisions. The first is whether to stay or sell. Seems simple enough. If you decide to stay, however, you must decide whether you need to renovate or rebuild. Whether it’s your property or an investment property, deciding whether to tear down an existing structure or remodel the current one can be a daunting task.
There are, of course, a few guidelines that can make the decision process a bit smoother. Obviously, if there is significant structural damage that cannot be “fixed” then a rebuild is most likely required. If the problem is related to outdated surface coverings or damage that can be addressed without impacting other aspects of the property, renovation is still an option. Here are a few other things to consider while deciding whether to tear down or renovate.
Local Zoning Regulations Matter
Local zoning laws are a set of specific rules and regulations that dictate what can and cannot be done in a given location. Neighborhoods located in areas with historic value often limit the nature and extent of work that can be completed on homes within the neighborhood. Many go so far as to require the homeowner to submit specific plans or project proposals, while others prohibit modifications of any sort.
If a particular property is considered structurally uninhabitable, you’ll need to check with local authorities before deciding to rebuild. The regulatory body will provide you with a set of codes and ordinances that must be met in order for the new structure to meet location standards.
Another large factor to consider before deciding to remodel or rebuild a structure of your property is budget. Take the time to determine beforehand what you can and can’t afford. Solicit estimates from reputable contractors for both cases, and evaluate the return-on-investment for each. Don’t forget to consider the cost of materials, labor, and outside expenses like living accommodations while the project is being completed. Oftentimes, a remodel may cost significantly less than a rebuild, but the intended use of the property and potential gains may persuade you to choose otherwise.
Figure in Personal Factors
Some property owners love certain aspects of their existing structure. Replicating things like old world charm and period-accurate materials can be costly. If you are attached to structural characteristics that may be expensive to reproduce, a remodel might be the more sensible option as it allows for some of the properties original features to remain in place.
Other personal factors to consider include the amount of time you are willing to be “inconvenienced” by construction, the future intended use of the property itself, and the neighborhood comparables. Lack of time constraints, intent to reside in the property indefinitely, or a string of rebuilds in your neighborhood are all good reasons to consider rebuilding or remodeling.