Renovate or Tear Down, that is the Question

From: Abe

"Hi Carl,

I own what was my parent's house. I like the area it is in. The only 2 problems I have are that it is too small for my liking and that there is a lot of work to fix it up. It has foundation problems, rot, and maybe even termite damage.

Since the house is paid off, would you know what factors should be taken into account between fixing the house, and building a new one. I know equity will be the biggest hit. Other than demolition and disposal, I would be starting all over.What would make the most sense?
Thanks,
Abe"

Hi Abe,
Other than emotions, whatever makes more cents should make more sense.

Get an estimate to add on, renovate (remodel), repair foundation, fix all the rot and treat the termites, and then compare the costs of all that to the cost of building a new house. By using the cost to build calculator on my “Getting Started” page, you can get an approximate cost to build a new house.

The desire to build new may still win over cents vs. sense. Such is the human psyche.
As far as your equity taking a “hit”, how much do you really have with the house in the shape it’s in?

Talk to a Realtor familiar with your locale (they aren’t too busy right now) and find out.

If you act as your own General Contractor to build or remodel/add on, your equity should increase either way.

Good luck,
Carl