Teardowns may be complicated, involve permitting, historic preservation, zoning and demolition challenges that homebuyers in developing subdivisions would never encounter. Here is a guide that would help answer the primary question; could a custom-built replacement and home demolition be a smart move for you as a homeowner?
How does one recognize a teardown home?
Potential teardowns are often houses that are not quite up to the current standards sought-after, yet attractive neighborhoods. They may be smaller regarding square footage, lack sufficient bathrooms, have outdated kitchens and are energy guzzlers.
They might also have serious structural elements that make them hard to sell due to the cost associated with repairs. Therefore, their pricing tends to be below the prevailing standard for their neighborhood or street and often remain unsold for longer, unless sellers are aggressively marketing them as potential teardowns.
According to teardown real estate experts, a teardown should support a new house, which when finished, is would be valued at 2 to 3 times the value of the teardown house upon acquisition. Alternatively, if you can purchase an older, functionally obsolete yet well-situated house for $300,000; and a newly constructed house constructed on the same location will support a value of $600,000 to $900,000, it may turn out to be a suitable candidate.
Does one need to knock down the whole house?
No. In certain communities, local state laws encourage considerable renovations over demolitions, simply by making the permitting fast and easy. For instance, you may be able to keep the current foundation, or add to it. You may be able to keep a portion of the existing wall or incorporate a portion of the old structure to your new design, thereby sidestepping local regulations on total home demolition.
In historic neighborhoods where teardowns are illegal, you may also qualify for tax credits by performing substantial rehabilitation.
Are there restrictions that may limit your ability to demolish a home, and construct a new one on the exact site?
Many older and desirable close-in neighborhoods have land-use regulations and codes, which are intended to protect the character of the town. Some have conservative historical locations that ban many teardowns or need replacement structures, to adhere strictly to the primary architectural standards and size of the neighborhood.
What type of local permits would one require?
Many municipalities have regulations that require you or your builder to acquire a home demolition permit before doing anything. You additionally have to contact utility companies like electric, gas and water, to establish how and when you can disconnect the building you intend to demolish. You should additionally check with the department of fire to determine what kind of oversight or inspection is needed before home demolition. Local government regulations may also need inspections for toxic materials within the house that is important if the structure is dating back to the 1960s when asbestos was used in ductwork, floorings, and ceilings.
Therefore, a teardown is a viable option for you. However, take note of the snares and costs, as well as potential traps up front.