Home & Garden Knockdown Rebuilds

[Caesar]

We bought well a few years ago (worst house in the best street etc). We love it, but there are some structural issues that we can’t put off dealing with for much longer. Fixing things would be pretty expensive and we wouldn’t get the money back (next owner will definitely bulldoze). We've looked at selling and buying, but nothing we can afford is on a block of land as good as the one we have now.

Knockdown rebuild therefore seems the best way to protect our investment. The block is definitely conducive to it, but I'm nervous about the time and uncertainty involved. Neither of us have ever built before, and the economic environment sucks for trying to plan stuff like financing and construction costs. We can put off the decision maybe six months, but not much longer.

Another possibility I've been toying with is moving out, and putting in some tenants who are happy to live in a house that's falling down if they get cheap rent in a good location. Then in a few years, hopefully the economy has picked up and we can reassess.

Just wondering if anyone has been in a similar quandary and can give any feedback or advice.

 

[Sinjin Smith]

My sister went through renovation of her house, kitchen, living area, one bedroom and laundry. It was just delay after delay to the point where they nearly had to re apply for the loan and because of the financial climate changing it would have been knocked back on review.

Appliances were not available for 2+years, building materials were scarce and when they did procure them the builders got sick or delayed for whatever reason, what was supposed to be about 4 months turned into 12. Sounds like what you are looking at is a much larger scope, I'd be wary. As said building and construction supplies are nigh on impossible to get an then there's always delay with labour.

I'd probably wait a bit, see if production of materials, appliances etc improves and you can source reliable builders.

 

[Hamingja]

An obvious but often overlooked thing is how you are going to finance the demolition.

People owe say $750k against $1m house.

Want they want to do is take $50k out for the demolition so $800k against $1m house.

Yes, great idea, except you are knocking the house down so the security value is going to be the vacant land only at that point and the bank is not giving you a loan at 100% LVR to do that.

The amount of people that can't wrap their head around that is staggering.