I want to dispel a few myths about this issue. Several times I have heard people say that a builder told them it would be less expensive to tear down their house and build a new one than it would be to renovate it into what they want. This statement is rarely true.
Basically if the house is in a very derelict condition and the concrete foundation is in bad shape then it is a knock-down/rebuild situation.
Another scenario that makes financial sense to build new is when an older single family house is on a lot that is zoned for higher density. For example many inner-city neighbourhoods now have an RC-2 land use in Calgary. Take a look at the community of Altadore for example and you will find a complete transformation from single detached homes to semi-detached or narrow lot infills. The land value is high and so the return on investment makes sense to build new.
When comparing a renovation concept that would involve a very large addition compared to the size of the original house, it generally makes sense also to build new.
In Calgary, most other single family homes built after 1950 lend themselves very well to renovation as a means to achieve the maximum value for the financial investment. Many “builders” don’t like doing renovations because they take more effort than building new. For a job well done it takes a contractor with a well developed skill set. This is also true with design. It is more work and takes a higher level of skill to properly design a solution that addresses the client’s goals as well as anticipating the construction issues involved in working with and tying into an existing structure.
So long as there is a good concrete foundation, usually the wood framing is also in very good shape. Most older homes have 2×4 wood framing for the walls which don’t meet code with batt insulation. However, there are numerous ways at addressing the wall (and roof) insulation to make the home thermally efficient and even exceed current code requirements.
Another concern about renovating is the possibility of finding mould in the existing house. Many people are scared of this and think that building new will alleviate any risk for mould. This is a total misconception since mould growth has nothing to do with the age of the building. Mould grows when the conditions are favourable which is a relationship between moisture and temperature. Many new buildings develop mould problems in the first few years after construction because of poor workmanship and design.
To date I have not seen a mould problem in any of my projects that was expensive to remediate. It is usually found in isolated areas such as bathrooms and around window openings and can be easily removed. Designing the house with careful attention to detail is the best way to prevent future mould growth.
In other words, don’t let the possibility of finding mould or the cold walls and floors as a reason to build new. These are easily fixed!
Another option to consider if you really want a “new” house is to rebuild on the existing foundation if it is in good shape. This greatly reduces the costs for excavation, foundation and site servicing & landscaping that would be required for a total new build.
Renovating can be a smart way to improve the functionality of your house especially if you like your current location, lot and neighbourhood. I really believe in giving inner-city houses a new life through renovation. With the ability to change window openings, roof lines or even constructing an addition to add space, the possibilities are endless. Many times just a reconfiguration of the internal spaces can solve the functionality problems. Generally speaking, investing in these properties is significantly less costly than building new and it greatly contributes to the revitalization of the community.