What is a “teardown”

A teardown is typically an old house with extensive structural damage. The house has little to no opportunity to be rehabbed so the best option is to the demolish (aka teardown) the house and build a new house. This is a common part of the real estate investment cycle, especially in hot market segments.

For example, South Tampa is currently experiencing a flurry of new construction activity. Since vacant land is scarce in South Tampa, builders are looking to buy old teardown houses that can be demolished. In certain pockets of South Tampa, the land value is higher than the value of the house in as-is condition so it makes more sense to tear the house down and build a new house on the land.

Image source: Source: http://therealestatecoconut.com/2011/01/valuing-a-piece-of-land-with-a-tear-down-structure/

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