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should I buy a house that I want to knock down?
A little backstory....DH and I have been looking for a house on and off for a few years, I'm mostly a SAHM and we're on a very limited in a sort HCOL area. We love the town we rent in (awesome schools) and just found a house that is way under (50k under) our budget. First problem, it needs a new septic system. Second problem, it has a obvious lean to it. It's an antique home, and in my mind that sort of explains the leaning. We don't know what else is wrong with it yet. Similar size homes in that neighborhood sell for about 2-3x as much.
I have this crazy idea to buy the house, live in it for 5 years or so while we save up as much money as possible, then knock it down and rebuild. Is that totally crazy? I don't see any other way to live in our dream town without being extremely house poor. There are nearby affordable towns, but the schools are not great. This house is also within walking distance of the train to DH's work which is ideal for us. So the location is perfect, the house terrible. WDYT?
Re: should I buy a house that I want to knock down?
We kind of did this with our current house, although we didn't do it to save money but because there were a VERY limited number of houses on the market in the neighborhood we wanted to live.
We didn't completely knock it down completely - we left a few exterior walls and the foundation. And we also stayed in our previous house until the renovation was completed.
A few things to note -
*You may not save money buying this house, knocking it down, and rebuilding. If it's an historic house you may need special permits, you mention the septic, you'll have to rent a place for at least 8 months while your house is under construction, you'll likely need to completely redo the landscaping when you're done, not to mention the general cost of a custom build. I'd talk to an architect and a few builders to get a rough estimate (knowing a lot can change in 5 years) before even thinking about it.
*As the PP mentioned, if it's an historic house you may not be able to tear it down and rebuild.
If you were doing this because you loved the lot and the area but weren't constrained financially I'd maybe so go for it. But I wouldn't go into this thinking it's an affordable way for you to get into the neighborhood you want.
There could be several issues involved, but the two most obvious to me:
Are there historic preservation laws that would prevent you from tearing the house down?
If you build something new, will you have sky high property taxes? In our area, new construction is taxed much higher than older homes.
If you can and afford it, then maybe.
We had a house in our neighborhood that was falling down pretty much. We would walk the dog past it and sort of wonder. Then one day they knocked it down and built a modular in its place.
Sadley, the modular wasn't done well and it looks like they ran of of money with it.
Wives Unscripted
Thanks for all your helpful replies, even though I realize now that I probably asked on the wrong board..
I'm going to do some research and try to find answers to the questions asked here. The house was built in 1875, which is actually pretty common for this area, I tried googling it and checking the town's website to find out if it is registered as a historical home, but found nothing. I think my emotions about being able to live in this town are probably clouding my judgement.
Why is repairing the existing structure not an option?
If you can't afford to tear it down and rebuild right now, I definitely would not buy it and hope that you will eventually be able to do this. Like the above poster said, you don't want to be stuck with a POS house that can't be fixed. However, if the price is below your budget and the location is perfect, I definitely think it's worth getting an inspection and some quotes on what it would take to repair the structure. See what repairs are necessary to make the place habitable, and find out what repairs could wait or that you could do yourself.
When we bought our current house, we were in a situation where I was stuck with a home I bought at the height of the market. I had no trouble renting it out, but the budget for our new home was very low because I wanted to be able to cover both mortgages if we ever lost the renters. We wanted to buy in an area closer to the city with excellent schools, but our budget was about 60% of the cost of the average home in this area.
Pretty much every house we looked at had issues and we had to really think about what we were willing to take on. When we made an offer on our current house, we had a lot of contingencies where we got quotes from a number professionals and could get out of the contract if the repairs were too much. The house is far from our dream house, but we plan to slowly change it into our dream house over the years with repairs, renovations, and an eventual addition. It's a lot of work and can be stressful, especially if you DIY a lot of things like we do, but I would absolutely do it again because I love where we live.
An entirely new septic system could cost $20-$25K in a HCOL area. If you lived in the house right away or not this will need to be done first. It sounds like you could find a lot more issues with the house during an inspection so being $50K under your budget doesn't sound like a big savings for a POS home.
I would seriously consider fixing the old home. Foundation issues can be fixed. Something like that would cost money but no as much a hiring someone to demo and build you a new one. You could talk to a general contractor you trust and have them tour the home with you when you do a walk through.
In all honestly though I would look farther away from your ideal location unless you're prepared to be doing some extensive remodeling and living in a construction zone for many, many years.