Yes, there are circumstances when gutting a property is cheaper and easier to do that to try to repair major damage or trench and repair to replace utilities. You just have to understand when one makes sense over the other.
Hooch requested: List them please. I buy condemned property and often get a large multifamily house for 5K or less and I haven’t run into a single one that would have been faster or more cost effective to gut. Maybe that’s for the 1K property.
First if you do not draw a permit, know one but you has any idea what your doing and unless you have a construction background you probable will not do work that meets and exceeds the current building codes.
If you are drawing permits and this includes a general construction permit, a electric permit, a plumbing permit, an HVAC permit and a roofing permit if it is required.
The law say’s the building or property (1 to 4 unit resdidential property) has what is called “Grandfathering” which simple means that if you “Do not touch it” you do not have to bring it up to current codes.
There are some minor exceptions because to get a permit finalled you will need to meet fire / life / safety issues (Smoke alarms, fire extinguisher, GFI’s for water area’s, etc.)
That’s simple enough, if I buy a home in great condition say a 1983 home, I really don’t have many issues if everything works and is serviceable, even changing a furnace or hot water heater is a minor issue.
But if your going into a home that is pre 1960 and have galvanized water piping you want to replace, ungrounded wiring in the walls with bad circuits or older screw in circuit breakers or knob and tube wiring and want to replace it, if the insulation in walls and cielings is non-existant or inadiquate and you know you need new insulation.
If your house has a masonry flue through the floors and has morter that has failed and has caused leaking and threatens the structural integrity, if drain lines were the old soddered fit in old cast iron or cast iron and clay and is rotten and you need to replace it, if gas piping has coroded and rotted and is unsound and unsafe and needs replacement.
These items and a combination of these items can cause you to be better off gutting than trying to trench walls and make repairs.
The building department will make you make certain replacements if you say remove more than 30% or so of existing cielings the building inspector will probable make you remove it all and replace the whole 1 hour burn through rating at the cieling.
If you have a property that is steam heat, is not working properly and would benifit from modern HVAC, this is good reason to gut the house and start from scratch, also changing from base board heating to modern HVAC is good reason to gut a building.
Sometimes if you have modern kitchen and great baths, you gut everything but those rooms and replace everything and repair as neccessary in the good rooms and rebuild.
A good drywall crew can hang, tape & mud, and texture a 3,000 sq. ft. home in 3 to 4 days at a cost of around $6k. Your cost to gut 3,000 sq. ft. with an experienced crew is probable $3k.
Of course rebuilding includes doors, door trim, base boards, finish carpentry and priming and painting.
A good crew can re-do an interior in less than 2 days and the painter will spray a blank interior with primer then paint.
Also if you have excersive cracking due to structural problems and need to re-level a home by what ever method, this may be a reason combined with other issues to gut.
My last full gut was in Washington State 3 years ago.
Purchase $62k
Triplex 3100 sq. ft.
Made application for change to 4 plex legal status. Status Change Granted!
Gutted
Rebuilt property from heating oil to baseboard heat.
All electric re-metered to individual meters.
Water individually metered.
Everything brand new inside and out including windows and siding!
Fully permitted with General, Electrical, Plumbing, and Roofing.
Construction cost $108k
Overhead $10k
Completed in 97 days
Start to finish and completely inspected with new C of O and full compliance.
Appraised for refinance $315k
Gross Rents $2725
Has legal parking for 2 cars per unit tandem.
All units have flat top stove / oven combo units, dishwasher, fan / microwave combo units, Ice & water in door refrigerator / freezers and 3 units have stack washer dryers and the largest unit has side by side washer / dryer.
All units have garbage disposals, tile tub surrounds, and full baths.
The 1 bdrm 1 baths are 650 sq. ft. with $625 rents
The 3 bdrm 1 bath is 1100 sq. ft. with $850 rent
Landlord only pays taxes.
Common lighting is on day night sensors with one common light wired to each unit.
This property sold for $335k in fall 2007.
GR