Definition
Purchase is about the land value; the structure isn't worth saving. Demolition and new construction are more economical than renovation. Tear-downs appeal to developers and investors seeking valuable locations where existing homes can't profitably remain.
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Tear-downs are purchased primarily for land value, with the existing structure demolished to make room for new construction. These properties appeal to developers and investors seeking valuable locations where the existing home cannot be profitably renovated. Tear-down decisions require analysis of demolition costs, local building codes, and new construction viability. Some historic properties may have restrictions preventing demolition.
Pro Tip
Tear-down projects require careful cost analysis including permits and environmental assessments.
Example
A tear-down property on prime land in an established neighborhood purchased for $300,000 demolished to build a $800,000 new home.