I have a 30's bungalow (2 BR, 1 bath, + finished/converted attic as 3rd master BR, full unfinished basement -- about 2,600 SF total) on a std 5K SF lot that I purchased some years ago. I owe about $80K on it, and a similar house four houses down sold three months ago for $530K.
The house needs complete remodeling, so I have been thinking over two options: Gut and redo inside existing shell/footprint, or demo and build new up to required setbacks, etc. (The existing roof and windows need replacing anyway.)
I've been told by local construction companies that building new after a demo runs about 1/2 the cost per SF as does a gut/redo. If that's the case, why would anyone opt for the "remodel" option for anything but the smallest jobs? In my case, the demo/new option has additional appeal because I could build with 10' ceilings and have an even better view from a "real" second story. And I'd also be able to pour the basement with more than its current 6' height!
I realize that the demo and new foundation will add to the cost, thereby offsetting at least some of the per-foot construction cost savings.
Anyway, I know this is a classic situation. But since this is a veritable fountain of experience and knowledge, I decided to write this up and see what you all have to say.
Thanks.