Is It a Remodel or a Tear-Down?

On yesterday’s real estate tour of Mercer Island, I stopped by one listing that was just, well, odd. And pretty beat-up after having been a rental for the last five years. But since this was on Mercer Island, it’s not unusual to see a house like that priced right where it was, not far under $900,000. Granted, it did have some nice views, but it needs a lot of work to get up to the standards of today’s buyers. Probably at least $100,000 or more for updates and new appliances. So, what would you do?

There are three options for a house like this: move in and fix what you can, take it down to the studs and totally remodel, or tear it down and build your dream house on a lot with some nice views.

Which choice is best really depends on your budget, time frame, and housing goals. It also depends a bit on the neighborhood. (Old real estate rule: Better to have the “worst” house in the nicest neighborhood that you can afford than the nicest house in a worse neighborhood!)

The biggest factor to consider is time. If you need to move right in, there won’t be time for much more than a few updates or repairs. Maybe you’d get the floors refinished, get some new appliances, and paint some walls. It may cost a few thousand dollars, but the changes could be made within a few weeks, most likely.

However, if you have more time and want a total overhaul, you may want to take the house down to the studs and remodel or tear it down and build your dream house on the space. If this describes your goals, consider how long each will take. A complete remodel will probably take anywhere from a few months to six months or more. Tearing down and rebuilding will likely take at least a year or more and will probably involve more professionals and bigger decisions.

Either way, if you are considering purchasing a house to be remodeled or torn down and rebuilt, plan to bring in the right pros before you buy to make sure your plans are feasible. At minimum, plan to call a general contractor and an architect and if possible, have them join you on inspection day.

While the costs of a total-gut or tear-down house on Mercer Island can run anywhere from the mid-500s to $2M and up for waterfront, you can find houses in similar condition for far less in different markets. Just chat with your Realtor about your goals and he or she can point you in the right direction.