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$100 – $200 per s.f.!! Wow! I would tear down and re-build. In our area (Alaska) most homes are selling in the $75 s.f. range. So much for us having higher costs of living, eh? Also, we experience less taxes (some local sales, no state income) and so we see a more tolerant approach from the local muni’s for new construction. The state and locals here seem to really encourage new construction, but we don’t have that much “old”. But then again, we have enough raw land to cover a full 2/3 of the “lower 48” states…
I originally came from the Coastal Northwest (OR, WA) and many of the older homes are selling for higher prices due to the influction of Californians moving north. My sister bought a 30 year old home on a mid-town (large) city lot (Eugene, OR) approx. 15 years ago for $25,000. The house, with NO improvements is today worth 5 times that. I think sometimes, a piece of real estate is better to hang on to. My dad always said, you can’t go wrong investing in dirt…
Good luck on your decision.
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Creature, I agree with you, I'd like to know whats wrong with these houses that are going to the land fill only after 30 years. Seams to me you could do alot of remodling for 300k+.
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Some just think new is better... Not me -- I don't think the "character" thing is a myth. But a 30 y.o. house isn't necessarily a treasure -- they were well into the post-WWII tradition of quickie houses by then. Maybe we should fault those builders instead of the current ones.
I was surprised by a nearby "remodeling" that kept about 15% of the old house and demo'd the rest. I walked around the drywalled place today (nice builder invited me in again) and saw the usual modern amenities -- high, multi-angled ceilings, lots of glass, almost no-wall first floor (a dumb idea I think), dozens of recessed ceiling fixtures (Freddy would have had a stroke), drywall, drywall, drywall covering plaster and wood lath. Yech.
I kept asking why they didn't the owners start from scratch, and why it wasn't a waste of money to buy a servicable house and then destroy it. Property values around here are higher than I thought; the neighbor to this project had done similar work and was looking at a return of more than what he paid to remodel -- without even having to list the property! Apparently there are enough people who have money and hate hassle that fixed-up (or virtually replaced) homes in old areas close to the city can sell, and sell easily, for more than the cost of the remodel. The neighbor's lot was no bigger than ours, but his asking price was double what we paid! This would work out to about 25% for the land, 75% for the house, vs. 50:50 for ours.
*In California property taxes are severely restricted. Local governments, deprived of traditional sources of revenue, use new construction as a vehicle in financing new infrastructrures. So in addition to building permit fees there are per square foot fees for schools, parks, roads, sewers etc etc. If there is an existing building on the site, it often provides credit for these fees in proportion to the existing square footage. Property tax assessments for new construction can be based on newly assessed value. For a remodel, no matter how extensive, assessment increase can be only on the value of the improvements themselves, not on the increased value that can be attributed to the project. It is often possible to categorize a demolition or near demolition as a remodel and thus get credit for the existing square footage in the reassessment. When all these factors are accounted for, the value of a lot with an existing residence can often be less than the value of a lesser priced bare lot.
*On TaxesAh, the flip side of the infamous Prop. 13.What is a typical assessed-value tax out there? In Arlington County, VA, annual tax is just below 1% -- the 1% is a big threshold that they brag about not having crossed. Of course, there are lots of other taxes and fees, but they are fairly low too -- a typical permit might be $30-60 (much more for new plumbing! $250 for a new sink), sales tax and income tax are each about 5%, and the roughly 5% car excise tax is being phased out. For totally new construction the permit fees are much higher. I don't think there is a major tax deterrent to renovation or reconstruction. (The builder i talked to mostly didn't want bulldozers messing up the foundation.) One nice thing about renovation is that if you are clever you can leave many technical code violations intact (e.g., R-11 in walls instead of R-13) because it is "existing" construction.Now that i list these i realize how hard it is to figure out exactly what the tax rate is. However, a recent Wash. Post report put our total tax burden lower than MD or DC (the DC metro area). At least real estate tax is deductible, which will be nice when I itemize some day. Our assessed values are fairly close to market value. The assessor has come sniffing around here with the permits I've pulled (the downside of being law-abiding), but no reassessment as yet. She seemed satisfied that the porch enclosure was a "3-season room" (mudroom in the NE) for lack of heat, I guess they look at year-round habitable area.In a suburb of Chicago, a friend's tax was about 5% but their assessed values were about 1/3 or reality, thus the effective tax was 1.67%.Sorry to prattle on, taxation has been on my mind lately.
*Just an add-on to my original post. Because of economic growth here in DuPage County ( Illinois ), we are rapidly running out of available land. So, we're starting to see a lot of teardowns and re-builds. Most of the lots in our area are about 1/2 acre in size. Larger lots, if they have only 1 older home on them, are sometimes subdivided; then the old house is torn down, and 2 houses can then be put up in place of the old one. Most of the teardowns I've seen are small ranch-style homes having 1 - 3 bedrooms. But nowadays, people want bigger and fancier homes; they want more than a house, they want a lifestyle. Yes, it would be a shame to teardown some of the older houses, especially since there are a number of Sears homes here and in nearby towns. I never gave much thought to the tax angle. Yes, we'ddefinitely pay a lot more, but then death & taxes ... you know ! Thanks for all the posted replies ! They've given me a lot to think about.
*Funny to hear where you are! The friend I mentioned, for whom I worked, lived in Hinsdale -- DuPage County, right? Certainly not Cook (I rented in the city).They had just finished their massive remodel -- tear out walls top to bottom (3 floors + finished bsmt), all the newest gadgets, wide open first floor with the not-so-artfully concealed structural posts (modern house people just hate those things).... And then her husband gets a chance to transfer to one of the vast Tribune Company's possessions in FL. So off they go, they must have taken a bath on the house (though he's far enough up, the company may have eaten some or all of it for them).I miss when people were happy with modest homes and hung out outside on hot summer evenings. The mega-home with "media room" and AC makes outside contact almost unnecessary.
*Yeah, Hinsdale is in DuPage County. I think a lot of teardowns have occurred there and in Elmhurst. My sister lives in Downers Grove on a street where most of the homes are in the $130k - $170K range. An older house recently got torn down, and a $500K ( yeah, half a mill ! ) was put up in its place. I don't know if anyone bought the house - they call these new houses "spec" homes ( = speculative ). I guess the idea is to put up a fancy house, get it sold, and make a bundle.
*Sometimes a "cornerpost reconstuction" is the only viable way to go. I know of a 100+ year old farm house sitting in the middle of 60+ acres. The house was built on rock foundation, about 6 - 12" tall, which sits directly on top of the ground. There is some heavy rot (this is in humid NC), only one bath in 2000+sq', and the floor plan is primitive, to say the least. Bulldoze you say? The kicker is, not one perk site on the property (very heavy grey clay that goes way deep). The existing system works fine (unless there is an overabundance of rain), but would never meet todays' inspections. Since most of the house isn't really worth saving ( except for the heart pine beaded 5/4 paneling, and some flooring) , the answer to keeping a house on the property is to tear down all but one corner post and rebuild from that. This probably stems from some ancient agreement the Termite and Powder Post Beetles Union has with the local governing bodies, but it is one way to go.
*Gray clay............NC.......McDowell Co.????
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I'm new to this "chat" idea so pardon my mistakes. My limited experience with dismantling and rebuilding wood-frame buildings is that a timber frame structure is feasible and stick framed buildings may be. Dismantled and rebuilt a 32' x70' pseudo timber frame barn (had 2x joists and rafters) built in the 40's. The remainder of the frame was oak-pegged timber with mortise & tenon and scarf joint construction. It went fairly smooth.
Also have a 3400 sq ft balloon framed victorian in storage which we plan on putting back up exactly per the original plan but platform framed. I'm doing this as a labor of love with a lot of help from friends and family.
Assuming they have to be dismantled, I believe that the most reasonable way to make use of the homes you are talking about would be to salvage all the lumber you can and reuse it on other projects. I am anticipating that trying to reassemble a stick frame building to the exact dimensions will be a challenge.
Dealing with reconnecting 2x members that have been previously connected and then separated is the toughest question. We used a sawzall to cut the nails and then pulled the head end stubs out to minimize damage. I expect to be making liberal use of Simpson and Cleveland connectors.
The best solution is to move the buildings intact. This wasn't an option in our case as we moved the house 150 miles and the barn 65 miles. The cost to move locally is driven almost entirely by cost to drop or raise overhead utilities. From the research I have done the mover's charges will pale in comparison to the power/phone/cable company bill. Trees, bridges and overpasses are other obvious considerations.
I can't stand to see perfectly functional buildings destroyed to make way for replacements that may or may not last as long.
Rambled long enough, hope you can keep some of those out of the landfill.
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We live in an area where most of the
homes are 30+ years old. Selling prices
are in the $120K - $180K range. Teardowns of some of these old homes
are now beginning. The new homes are
in the $350K price range.
QUESTION : When does a teardown make
financial sense ? What are the important
issues ? How could a person finance a
teardown & re-build ? Thanks for your
help !
*One of the main issues is land value. Demand can be placed on a specific geographic location in just about any town or city. When core lots are no longer available the value increases.Generally you don't tear down a 150,000 dollar house to build a 150,000 house.Another issue is the cost of renovation. When the cost of repair is equal to the cost of new, then new is the way to go. The rationale for this is the cost of renovation normally exceeds the initial estimates, because of unforseen problems.These are just a couple of ideas, I'm sure the rest of the boys & girls will help with some other thoughts on the subject.
*Your friendly bank will finance a construction loan. Be prepared to post other collateral, other than the home in question. Also, be prepared for the Bank requiring a completion bond, or the use of a construction disbursement account (pay as you go, with lien releases).Construction costs vary from state to state and according the quality of the home. Expect costs to run somewhere between $100-$200 per foot.Hope this helps
*$100 - $200 per s.f.!! Wow! I would tear down and re-build. In our area (Alaska) most homes are selling in the $75 s.f. range. So much for us having higher costs of living, eh? Also, we experience less taxes (some local sales, no state income) and so we see a more tolerant approach from the local muni's for new construction. The state and locals here seem to really encourage new construction, but we don't have that much "old". But then again, we have enough raw land to cover a full 2/3 of the "lower 48" states...I originally came from the Coastal Northwest (OR, WA) and many of the older homes are selling for higher prices due to the influction of Californians moving north. My sister bought a 30 year old home on a mid-town (large) city lot (Eugene, OR) approx. 15 years ago for $25,000. The house, with NO improvements is today worth 5 times that. I think sometimes, a piece of real estate is better to hang on to. My dad always said, you can't go wrong investing in dirt...Good luck on your decision.
*Tearing down a 30 year old house is sad, and dont be confused, Im no environmentalist. What does that say about craftmanship? Houses built in Europe (Germany) are expected to last between 200-400 years. And some are still standing!! Given the number of variables involved I'm sure I'll get bashed here but sadly we are really a throw away society.Dave
*Creature,I was waiting for a post like your's.I totally agree.30 yrs.old,and tear it down?Why build a new one for 350,000,when you can buy a 30 yr old for 150,000?Maybe I'm reading this wrong,but spend 120k-180k for a house,tear it down,then build a 350k house?Now you have a 470k-530k house!Aren't there any empty lots to build on?Around here the 80-120 yr old houses are selling for 25k-120k.(depending on condition and style).We can build new for 85k-160k.That is $60-$80/sq.ft.(basic no frills house).As far as financing?If you find someone to finance you for that,let me have his number,I have alot of ideas!!!!
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Orange, it's greyer!!!!!!!!