You may not know it yet, but buying a teardown might be a viable option for your next home building project. Whether you’re looking to build a custom home for yourself or an investment property, teardowns can be a goldmine. Looking for the perfect vacant lot can be a chore. So if you seem to be striking out, try looking for an outdated home that’s mostly valued for the land it’s on.

Buying a teardown can be a solid investment and a great start to your next home building project. But it can also be a headache. It’s best to know what you’re getting into before you buy a teardown.


This may seem like a no-brainer, but you want to buy a house that’s valued correctly. Overpaying for a teardown can throw your whole budget off and make your project pricier. A good way to see if a teardown is worth your dollar is to do a little math. Once you build a new home on the lot, it should be valued at two to three times more than what you bought it for. Ideally, you want the new home’s value to cover both the acquisition and construction costs.


Depending on the home’s location, some local laws will restrict the new house you want to build. This is especially common for historic or deed-restricted neighborhoods. In certain preserved, historic districts you aren’t allowed to tear a structure down. Know your limitations before you buy, that way you’re not stuck completely rearranging your plans.


Unless you have enough cash in the bank to cover your entire project, you’ll have to secure financing. This can be more complicated with a teardown than a normal mortgage. There are three factors to consider: the price of the teardown, the demolition cost, and the long-term mortgage on the house you build. The teardown price and mortgage cost will vary based on the location but expect to pay up to $15,000 to tear down the existing structure. It’s a good idea to donate any materials you can before teardown to help recuperate some of the cost.


The best advice we can give is to hire a contractor who has experience and local expertise. Markley Construction knows Central Florida and what it takes to build a successful new home. Call today or email [email protected].

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