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Demolishing vs Development in Real Estate | Lane Lowry | Real Estate Development
a Demolishing vs Development in Real Estate by Lane Lowry | Aug 13, 2020 | Real Estate Development
As a real estate investor, there are times when a choice needs to be made – to demolish or not to demolish. Many neighborhoods have that one broken down, old McMansion or dilapidated storefront that affects the curb appeal of an entire city block. While the question might seem easy at first, there are pros and cons to starting over from scratch vs. remodeling an existing property. Many local governments will encourage the tax revenue gained by increasing the property value of a neighborhood. For this reason, sprucing up a home to match the surrounding neighborhood properties will be the quicker, more appealing option. However, this is only possible if home inspectors concur that there is enough structural integrity to rebuild. If you wonder whether a home is a good candidate for remodel, look for things like an outdated kitchen or bathroom, as opposed to a larger scale issue like square footage compared to the other houses in the neighborhood. In some cases, in addition to making a choice between demo vs. development, a real estate professional might see re-development as a potential option. When looking at commercial structures and empty lots that sit on high-value parcels of land in urban spaces, this other option is known as in-filling or urban land
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9/2/2020
Demolishing vs Development in Real Estate | Lane Lowry | Real Estate Development
recycling. This concept of urban land recycling also has its share of challenges, but the idea is to repurpose the space for a more practical, modern-day use. Sometimes this is done as part of a gentrification project. Ultimately, it helps to weigh the pros and cons of every decision before committing to a full demolition or a remodel. Make sure you do your research on other properties in the area that have a similar history to the property you are considering and find out what your return on investment will be before pouring money into either decision. A complete teardown should produce a new house that will be double or triple the value of the original property. Sometimes, no matter how hard it is to hear, there just isn’t enough to work with and you’ll need to start from scratch. If that is the case, make sure you have all of the permits and abide by zoning restrictions and historical preservation rules.
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