Buying a existing home, knocking it down and building new?

MJ · Jan 07, 2007 1:44 pm

Hi,

We are interested in buying an existing home (approx 50year old, nothing special), knocking it down and then building a new home.

Does anyone have any comments, things to look out for, price problems and blowouts, time it takes for the whole process, any recommended builders etc.

Any help would be much appreciated.

Thanks,

MJ

norbs · Jan 08, 2007 11:47 am

Hi MJ,

We've just started looking into this ourselves. Well, we are looking at starting the knock down soon

I guess you may consider the following:-

- Is the property Heritage listed (check with the local council).
- Can you build the style of house you want, are there any restrictions
- Is the land big enough particularly with easements etc.
- Will the direction of the land (i.e north, south facing etc) work with your house design
or living requirements. I think this point is often overlooked particularly if you consider
energy efficiency, direction of light etc.. Can be worked around to an extent.

As for costs, building etc.., well that is where you need to do the hard work and a place like this is a great start. My partner and I have decided on a style or two that we really like (Heritage in our case, which in isteslf has a number of options), and then research all the builders.that build in this style. Infact we are off today to see another !

Good luck and keep the questions coming on this site !!!

MJ · Jan 08, 2007 8:13 pm

Thanks Norbs,

The builder for me is the biggest concern at the present time. Does anyone have any opinions on whether to go with larger builder (ie Simonds, Metricon) or go with in independent?

Thanks,

MJ

Michelle · Jan 08, 2007 8:19 pm

If you don’t want any building hassles…. I would always suggest a private builder!!!

Adrian B · Jan 08, 2007 10:07 pm

Hi MJ,

I built with Metricon, and had very little hastleat all. If you have a look at my posts in this part of the forum, it shows photos and details some our expreience with Metricon.

Adrian B.

norbs · Jan 09, 2007 12:13 pm

On choosing a builder you must consider the following:-

- Do I just want to select from a limited number of designs and options, sign the contract and
hopefully be handed the keys in 6 months time. Least ammount of work, hassle and
'flexibility'.

- Or do I want to have more options in terms of design and choice. Do I want to do some
of the work myself. There are builders out there that don't charge for creating a custom design (may cost more in actual building though) and allow you to build to certain stages if you want to take over.

- Or do you want to do the whole lot yourself (owner builder). Good option if you are connected with builders in some way.

We are choosing option 2 and will build to lockup. The rest we will partly do (e.g interior painting) and some parts (i.e kitchen) we will contract out. All the while we will have choice on what goes in the house !!! We are reluctant in doing owner builder because we have no real experience with this. Also, it would be hard to get a handle on what the total cost would be.

Vlad76 · Jan 09, 2007 3:39 pm

I would say things to consider would be the following:

Type of area you're going to build in
resale value versus costs

I had a look at a number of companies as well as small builders.
What I found was that companies like Ravida and Glenville are the most expensive of the lot
Private builders can be cheaper, but by the time you pay the architect etc, it is not cheap.

Building to lockup stage and doing the rest yourself is an option but the costs can blow out of control unless you have experience in this caper. And the quality is not guranteed. One trader will end up blaming the other and time will also likely to be a factor.

I have chosen to go with the big builder, only because I was able to find a perfectly suitable design. There are pros and cons. I am able to customise the facade a fair bit, as well as upgrade the interior, but you don't get the same level of service as you would with a more expensive builder. You have to chase them, rather than them chasing you.
And you get the feeling that if you don't sign the contract, they don't really care either way.

Joe Smith · Jan 09, 2007 3:50 pm

I have built with Orbit Homes in the past and found them to be excellent. I have spoken to them recently as I am interested in buying in an established area and knocking down the house to build a new one. They informed me that they would look after the complete demolishion as well as the new construction and all permits as well inc. town planning and demolishion permits. Worth considering.

MJ · Jan 14, 2007 11:24 am

Thanks all for you advice, very valuable.

guym · Mar 11, 2007 1:36 am

norbs

Hi MJ,

We've just started looking into this ourselves. Well, we are looking at starting the knock down soon

I guess you may consider the following:-

- Is the property Heritage listed (check with the local council).
- Can you build the style of house you want, are there any restrictions
- Is the land big enough particularly with easements etc.
- Will the direction of the land (i.e north, south facing etc) work with your house design
or living requirements. I think this point is often overlooked particularly if you consider
energy efficiency, direction of light etc.. Can be worked around to an extent.

As for costs, building etc.., well that is where you need to do the hard work and a place like this is a great start. My partner and I have decided on a style or two that we really like (Heritage in our case, which in isteslf has a number of options), and then research all the builders.that build in this style. Infact we are off today to see another !

Good luck and keep the questions coming on this site !!!

Hi Norbs,
I am looking to build a simple old style home (e.g. California
bungalow). I find the big company builders lack the style and finish.
You can tell it is a "production line" style.

Who did you decide on in the end?

Regards
Guym

ahuang · May 30, 2007 1:29 am

A few tips from my experience:

1. Check if there's any neighbour's power line over your property.

2. Check the location of the water meter. Try to work out the location of the Main tap from Water board. Our future driveway is now over the Main tap. If there's any problem in the future, Sydney water would need to damage our driveway to reach the Main tap. Too late for us to change now as all drawings approved by council.

3. Neighbours... can't do much about this, but they can delay your process and cause lots of trouble. One of the new home owner in our neighbourhood had to delay their project for about a year and cost $10K extra because the neighbour complaint that their new house is too high and they have to change the design and drop the front of the house.....

4. Trees and old stumps, depends on whether you like trees or not. They might be a problem. Old stump could bring termits and it's quite expensive to remove...

Hope this helps...

Cheers
Allan
http://building-our-first-house.blogspot.com/

Yak_Chat · May 30, 2007 12:15 pm

Didn't see it mentioned.
Be aware of the cashflow issues.
Buying a hosue and land packages is more expensive than land alone, then you have the extra cost of demolition, progres payments for the new house, plus the costs of living elsewhere while the new house is not yet liveable.
If that's not an issue then see above for the other sugegstions and go for it if the suburb is the one you want to live in.
Steve

Cabinfever · May 30, 2007 1:00 pm

The other element to financing is that in most cases you will only get finance to a total of 95% of the cost of the existing house & land.

Let's say you buy a house & land for $300K and intend to demolish the house & rebuild. Even if the house is falling apart it may be worth, say, $50,000. If you've borrowed 95% (or even 80%) of the original $300K, you may be refused permission to demolish by your bank because the total value of the property is now worth substantially less than its immediate resale value !

It doesn't matter that you say: "Oh, but we're going to rebuild". The bank will look at the fact that 'their investment' after you demolish is now worth only $250K, when they've lent you $300K.

So if you do need to borrow heavily, make sure the valuation for the initial finance is based ONLY on the land !

Andrej · Jun 11, 2007 6:33 am

I found this forum just by an accident, but I can't resist to reply, because I'm doing the same right now. Cabinfever is right, the main problem can be the bank. I bought an old house, too(70+ years old). The first plan was a total reconstruction, but then I told my wife, that if we are going to invest that much money, we can make a totally new house. But we needed a bank permission for the building permission. We had to deposit some money to the bank as a guarantee until the house was build up again(or to the stage where the value would be the same as the credit).

btw you can follow our "recunstruction" process here

http://www.house-reconstruction.com

Cabinfever · Jun 11, 2007 8:54 am

Welcome Andrej !

I've often thought about the 'tipping' point when it becomes more economic to rebuild than rennovate. Interestingly my nank will lend me what's required to knock down & rebuild (with the provisos above of course); but a *big fat $0* to rennovate...

Perth_Euro · Jun 11, 2007 12:15 pm

Andrej

WOW, what a set of pictures. You'd wanna make sure that your neighbours new about the development haha.

Where abouts is your redevelopment taking place?

cheers

Andrej · Jun 12, 2007 6:52 am

Perth_Euro

Andrej

WOW, what a set of pictures. You'd wanna make sure that your neighbours new about the development haha.

Where abouts is your redevelopment taking place?

cheers

Hey,

I love to see the changes there and I want to have many pics to remember every step of the work.

The neighbours had to know about it, they are included in the building permission process, they are happy a new house will be near theirs, even though it wasn't easy for them, when the company demolished the house(mostly by hand, but still).

Place is Bratislava, about 5km from the city centre, thats why I had to go this way, its almost impossible to find a ground here, all are outside of the city.

Andrej · Jun 12, 2007 6:55 am

Cabinfever

Welcome Andrej !

I've often thought about the 'tipping' point when it becomes more economic to rebuild than rennovate. Interestingly my nank will lend me what's required to knock down & rebuild (with the provisos above of course); but a *big fat $0* to rennovate...

Thanks, pleasure to meet you, guys.

In that case, the easiest way would be to become credit for some other real estate you own. Or to build it slowly with cash.

ahuang · Jun 12, 2007 1:17 pm

Hi Andrej,

Love your pictures!
I thought my demolishing work was difficult as our house was quite close to neighbours house, but compared to yours it's nothing...

Added your link to my blog if you don't mind. Keep up the good work!

Cheers
Allan
http://building-our-first-house.blogspot.com/

ahuang · Jun 12, 2007 1:20 pm

One more thing, have you asked Perryr to add your site to the sticky post where all house building blogs are listed?

Cheers
Allan
http://building-our-first-house.blogspot.com/