When does it make sense just to tear down an old house?

Say you're driving around, looking at open houses in an upscale neighborhood that you'd badly like to buy into. You find a quaint, old two-bedroom surrounded by modern 4,000 and 5,000 square-foot homes that's the right price and fits the old real estate axiom: "Always buy the least expensive home on the block."

But when you walk inside, the agent greets you with a sheet showing the dimensions of the lot and the news that "it's a teardown."

Maybe. But what if you're more interested in preserving the look of the old architecture than building out a McMansion to the property lines? What if you don't want to dump a few truckloads of wood and drywall into the local landfill, and would rather put off a major rebuilding job until a few years down the road?

Bottom line: How do you figure out when you should remodel, and when you should tear down and start over?

BankingMyWay

"There's never been a set formula, you have to take all the factors into consideration and crunch them down to see what works best for you," says Jason Gideon of Advanced Designs LLC in Clinton, Iowa, which designs and builds custom homes throughout the Midwest.

Your first step is probably to get a second, third and maybe a fourth opinion about what should be done to the house. A home inspector with no dog in the fight (he's not going to be hunting for a contract to build the new home) can give you a take on the present home's overall condition and what it will cost to fix it up. A realtor can give you an idea of the home's value fixed up compared to a new structure on the lot. An architect can give you some ideas for a new house and also how a remodeled structure could work.

If you liked this article you might like

Buying? Watch Out for These Open House Tricks

Watch Out for These Home-Selling Tricks

Watch Out for These Home-Selling Tricks

Why You May Need Flood Insurance

Need for Flood Insurance Hits Home

Need for Flood Insurance Hits Home

Got Gold? It's Time to Invest in a Safe

Got Gold? It's Time to Invest in a Safe