Note that you will likely need a home renovation permit, but a renovation permit is usually easier to get than a new-build permit is.
Another consideration is that it's generally more expensive to build a home from the ground up than to renovate. With a renovation, you can choose what you wish to renovate, only doing a room or two, as opposed to building a whole new house.
The decision on whether to build from the ground up or to renovate depends on what you have in mind. You're more limited on what you can accomplish with a renovation. With a new build, you're limited only by your imagination, and of course, you get a brand-new home. If you have the time, money, and inclination to build a new home, then that might be the right decision for you.
Complete teardown or fix-and-flip
Real estate investors who buy homes to either fix and flip or to buy as rental properties always look for the best deal possible. And that often involves buying fixer-uppers. The more desirable and less costly solution for investors is generally to improve an already-existing property, but sometimes, a teardown might be the better option.
For example, if a home sits in a great location but is in terrible shape or has experienced functional obsolescence -- the design or size is not what people are looking for anymore -- a teardown might be in order.
But a teardown involves additional steps before the new build can take place. For example, you must get a permit to do teardown work. You'll also need to get all the utilities disconnected and properly taken out. And, depending on local zoning laws, you'll need to have the site inspected for hazardous materials, such as asbestos, lead-based paint, and potentially underground storage tanks, removing any hazardous materials that may be there.
The importance of a good construction crew and contract
Whenever you hire a construction crew, it's important to make sure they're up for the job. Make sure the general contractor and the subs they will use are licensed; ask for a list of all the subcontractors and proof that everyone holds a license in the specific job they will do. Interview several builders, and review their portfolios. The more experienced the contractor, the faster the job will go.
Once you've settled on a builder, review the contract carefully before you sign. Here's what to look for:
The work to be done
This part of the contract describes everything the project manager must do to complete building your home, including getting the proper permits before beginning the work. Drawings and specifications should be attached to the contract for both you and your contractor to reference. Make sure specifications match what is outlined in the contract.
When the work will be completed
This is where your construction timeline comes into play. It allows you and your builder to be on the same page every step of the way on what should be completed and by when. There should be allowances for bad weather, inspection delays, or other issues beyond the contractor's control. For delays other than those specified in the contract, it's a good idea to include language in the contract about charging the contractor for each day they go beyond the deadline.
The contract should specify when and how much you need to pay throughout the project. Usually, owners pay contractors some money upfront and then fund the rest of the project in intervals.
Your contract should have sections for how to change the scope of work, what sort of warranties you have, how to resolve disputes, and what constitutes a breach of contract.
Timesaving tips on building a new house
A construction timeline can help you get the job done as quickly as possible. Chances are, while your house is being built (if you plan to live there), you're renting a place and might also be paying for a storage unit for your furnishings. The longer you wait, the more money you're spending. Here are some ways to shave off some precious time:
- Make sure you and your contractor are on the same page regarding the scope of work. If things need redoing, you have added more time to your construction process and timeline.
- Consider a simpler layout and floor plan wherever possible. The more complex the plans, the longer the build will take.
- Choose the start time. Usually, home builds go fastest when started in the spring because of the better weather. But if you live in a mild climate, you might wish to consider fall for the speediest build since the demand for contractors and subcontractors is usually less during the fall and winter.
Regularly look at your timeline to ensure your project stays on schedule. If something needs to happen before work can proceed, for example, you can be proactive by reaching out to the right people to get that part of the job done. Reminding everyone of the deadlines agreed to in your contract and staying on top of things can help ensure a timely build.