If you want better, tear down and rebuild. If you want cheaper, remodel

Choose Between Better or Cheaper
If you want better, tear down and rebuild. If you want cheaper, remodel. Even a wide-ranging whole-house remodel will still be cheaper than tearing down and building anew.

According to Roger Greenwald, RA, AIA, “the cost of tearing down and rebuilding will be about 20 percent higher than engaging in an extensive whole-house remodel. But the architectural benefits of tearing down and working with a clean slate can be huge: Better fundamental architectural design, all new systems, clean circulation, high-quality windows, new and efficient heating and cooling systems, tall ceilings, and space designed for your personal living patterns placed where you need it.”

Determine the True Condition of the House
While all houses can be remodeled, not all houses should be. Industry professionals generally agree that the following conditions merit a tear-down/rebuild, or at least swing the argument further in that direction:

Desired improvements cannot be contained within the existing house footprint. Thus, you want an addition. The need for additional space is certainly not the only reason for building anew; additions get built all the time. The issue is that it happens in conjunction with extensive, expensive remodels of the existing house—a double draw on your funding.
The foundation is bad and requires a lot of work before the house can be remodeled.
Are ceilings too low for your liking? It’s no simple matter to raise a ceiling—unless there is plenty of empty space up there. The floor above must be removed and then rebuilt.
Be Aware of Zoning Restrictions
Zoning laws govern the type, size, and location of buildings on any property. In urban and many suburban areas, home rebuilds often are restricted to the footprint of the original house. In other words, you can’t tear down a small house and put up a mansion. Zoning laws also may restrict the height of a new house, so you may be limited to not only the old footprint but also to a one- or two-story structure. Additionally, laws may not allow rental properties in many zones. If you’d like to build an addition or carriage house to use for renters, this may not be allowed.

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