Any kind of building project is going to involve a lot of work and a lot of coordination. But the kind of project you want to do will have very different needs and procedures depending on your final goal. If, for example, you find a fantastic opportunity for a piece of property with an old building on it, you have two options. One of those options is to simply tear everything down and start all over with a brand new building. The other option is to restore that old building to its former glory and bring back new residents or business.
The question then becomes, which one is the right move?
Gauge The Feel Of The Property
One of the most important things you need to consider when looking at a building and considering either a tear down or restoration is whether there’s any history or legacy behind the building. An unremarkable warehouse, for example, that has been quietly doing its job for decades is not going to have the same attachment to it as an old school, church, or prominent storefront or office building. Things change a lot of if anything of actual historical note actually occurred in the building.
From a commercial perspective, a building with history can be a notable selling point. Many projects are now taking old schools and churches and turning them in condo residences, or repurposing them for new commercial/retail projects.
The Condition
This is another huge factor in determining whether the cost of investment is going to yield profit or not. In some cases, a building may be old, but remain in very functional condition. With a bit of new wiring, insulation and plumbing to bring the infrastructure up to modern code, and restoring the exterior, you can enjoy the good PR that comes from preserving a building with history, while at the same time enjoying the profits that come from people wanting to be a part of that history, either as new residents or businesses.
“Good bones” and other structural considerations can often make or break the decision to rehabilitate a building. This decision has to be juggled with the long term prospects. Even a sizable investment in the beginning can be offset in the long term with good occupation rates for either business or residential needs.
Location
Another factor can often be location. The popularity of a particular area often plays a role in the condition of buildings in that area, as well as local sentiment towards the property. Buildings on the outer edges of cities that don’t have the same legacy as downtown structures may lack both the care and the history of buildings closer to a city core.
If you see a property opportunity, getting a hard money loan to capitalize on it is important. But it’s also important to make sure your vision for the project is properly planned out. Knowing when to rehab and when to tear down and start over will set the whole tone of your project.