Is My Property Suited to a Ground-Up Remodel?
September 3, 2015
In our last post we took a look at our ground-up remodel of a Lake Sammamish home, in which the owners had fallen in love with a waterfront lot and decided to tear down the existing house and construct something more modern and spacious on top of its expanded foundation. As you can see, the project turned out beautifully, and the owners were very happy with the result.
If you’re also in love with a piece of land but not the home currently sitting on it, you might be wondering whether you should do the same thing. Let’s take a closer look at what makes for a viable “ground-up remodel” and what doesn’t.
1.) Do You Own the Home?
A ground-up remodel takes a lot of equity upfront because mortgage lenders will rarely consent to the demolition of an existing structure. Even if you plan on replacing it with something that will double or even triple the property’s value, very few lenders will allow you to destroy the standing house—the only source of security on the loan—unless you have another source of collateral. If you are able to buy the property outright and also finance the new construction, go for it!
2.) Do You Already Live There?
This can be much trickier to navigate than the purchase, demolition, and ground-up remodel of a completely new-to-you property. In the latter case, you’re usually able to not only put up your current equity-laden home as collateral for financing, but your family has somewhere to live during the construction. Our project on Lake Sammamish, for example, took six months—if you’re already occupying the house you want to tear down and rebuild, you will either need to rent a house through the duration, stay with family, or buy a trailer. You can live ina house through most basic remodeling projects, but complete demolition and rebuilding is unlivable.
3.) Can the Property Support the Value?
For most homeowners, this is the biggest question. You don’t want to sink a ton of money into a property that can’t bear the weight of its own price tag. If you’re dealing with an old, small home in bad condition in a neighborhood where the surrounding homes are selling for two or three times as much, you might have a good candidate for demolition, however. For example, if you’re able to buy a home for $350,000, and the other houses on the block have been selling for around $1 million, demolishing and remodeling could be a sound investment. Property features like being located near water, a great view, an up-and-coming neighborhood, a new transit center, or a very good school system can all be indicators that a structure can support the value of its rebuild.
4.) Is It a Problem of Function, or of Vision?
Even if your ground-up remodel makes sense from an investment standpoint, you need to have a strong sense of vision to pull off this project and be happy with it. The Lake Sammamish home wound up so well because the property owners worked with us and our partners at Encore Architects to design the perfect spacious modern home for their vision. If you don’t know what you want, don’t try to execute a dramatic ground-up remodel because you might not even wind up that much happier. If your problems are more functional and your house has “good bones,” simpler remodeling or retrofitting projects might be the best way to improve your home. For example, if the home is too small, we can add a second story, pop out a room on the first floor, or convert an attic space to an additional bedroom. If you have serious structural problems in your live-in home, it might seem easier and cheaper to just bulldoze it all and start over, but repairs will likely be less expensive and easier in the long run. There is a huge amount of bureaucracy and planning that goes into a ground-up remodel, including zoning, city permits, and HOAs, and if you don’t have a driving vision the work load probably won’t be worth it to you.
If you have any questions about what kind of remodeling is best for you and your property, contact us at Harjo Construction! We would love to talk through your project.