Renovate the old house or take it down: how that decision actually gets made

I run a renovation company. You would reasonably expect me to argue that the old house should be saved.

I do not, and I want to explain why, because the renovate versus demolish decision gets made badly more often than almost any other decision in this business. Usually it gets made emotionally, by someone who loves the house. Occasionally it gets made on a single number from a single quote. Both routes produce regret.

Here is the order I actually work through it.

Nobody decides this on cost alone, and they should not

The tempting version of this decision is a straight comparison. Renovation costs this, a new build costs that, pick the smaller number.

It falls apart immediately, because the two options do not produce the same thing. A renovated 1958 house and a new house on the same lot are different products with different lifespans, different operating costs, different layouts and different resale positions. Comparing their prices without comparing what you get is like comparing two cars by weight.

So the cost comparison comes last, after three questions that are not about money at all.

Question one: what is the structure telling you

Foundation first, always.

If the foundation is sound, square and dry, renovation stays firmly on the table and a lot of good options open up. If the foundation is failing, cracked through, or sitting too low to give you useful basement height, the picture changes fast. Underpinning or replacing a foundation under a standing house is some of the most expensive work there is, and it is disruptive in a way that surprises people. At that point you are spending new build money to keep an old building.

Then framing. Houses built before about 1980 in this region frequently have framing that does not correspond to anything in a current code book. Not necessarily unsafe, but non standard, which means every subsequent trade has to work around it and every one of them charges for the trouble.

The structural question is not "is it standing." Almost everything is standing. The question is whether the bones are good enough that everything you build on top of them is straightforward.

Question two: what happens when the walls open

This is where budgets go to die, and it is worth being blunt about it.

Open up a pre 1980 house and the common findings are outdated wiring, galvanized plumbing that is at or past the end of its service life, asbestos containing materials in flooring, insulation or drywall compound, and the framing situation described above. Any single one of those is manageable. All four together is a different project than the one that was quoted.

Asbestos in particular has to be identified and abated properly before any demolition work proceeds. That is a legal requirement, not a judgment call, and it belongs in the plan from the beginning rather than as a mid project surprise.

The reason this question sits so high in the order is that it is the one you can partly answer before committing. A proper investigation, opening up a few strategic locations, testing for hazardous materials, getting eyes on the wiring and the plumbing, costs a fraction of one percent of the project and tells you most of what you need to know. Skipping it to save that money is the most expensive decision available on a project like this.

Question three: what do you actually want at the end

Now the part that decides most of these.

If what you want is the existing house with better finishes, more light and a modern kitchen, renovation is almost certainly correct and probably comfortably cheaper.

If what you want is a fundamentally different layout, different room count, different ceiling heights, a different relationship to the yard, or significantly more floor area, you are asking the old structure to become something it was not built to be. Every wall you move, every opening you widen, every level you change adds structural work, and structural work in an existing house is far more expensive than the same work in a new frame where nothing is holding anything up yet.

There is a point on that curve where you are replacing the structure, the systems and the envelope. When you reach it, you have built a new house at renovation prices, and renovation prices in this situation are not lower. RealDream's published figure for an average full home renovation is $200,000 to $400,000, with a full gut of a large home running past $700,000. Those are real numbers for real projects, and at the top of that range the honest comparison against new construction is much closer than most people assume.

The character question, which is real

Some houses are worth keeping for reasons that do not show up in a spreadsheet.

Original millwork, old growth fir that cannot be bought now at any sensible price, proportions and detailing that current construction does not reproduce, a streetscape that the house belongs to. These are legitimate reasons to renovate a building that a purely financial analysis would take down.

I would only add that this reason has to be named out loud. When someone tells me they are keeping the house because renovation is cheaper, and the numbers say otherwise, what is usually happening is that they love the house and have not said so. That is fine. It is a good reason. But it should be an explicit choice rather than a bad calculation, because the explicit version leads to better decisions about where the money goes.

The test

If the foundation is sound, the systems are serviceable or cheap to replace, and you want broadly the house you already have, renovate. It will be less expensive and less disruptive and you will be finished sooner.

If the foundation is compromised, or the walls are hiding several expensive discoveries, or you want a genuinely different building, stop trying to make renovation work. The numbers converge, and once they converge the new build wins on every measure that is not sentimental.

Most projects are not close to the line. The ones that are close are the ones worth investigating properly before committing.

Nima Gerani is the founder of RealDream Contracting, a renovation company working across North Vancouver and West Vancouver, with select projects in Vancouver, New Westminster and White Rock. Reach them at info@realdream.ca or (604) 401-4849.