Buying to tear down and rebuild...

[West996]

Q: How do I calculate or evaluate if it would be a good choice to buy a house to eventually tear it down to build a new house on that same lot.

Back Story: My wife and I live in Toronto. We will never own home in Toronto. (Canada) When our daughter it old enough we may move some where affordable, we are thinking Chatham. My wife has family there, we already own one rental property there.

I don't want to wait 15 years to buy a house then, or to buy land to build on (we'd like to be in the city). I'm thinking that if we buy a very cheap house now, maybe 150k or so. Rent it out for 15 years while we will live in Toronto, then tear it down and build the house we want when we are ready to move.

I'd like to hear all comments and criticisms anyone is willing to venture please. You won't hurt my feelings.

[waltworks]

Why don't you want to wait 15 years to buy a house there?

I mean, if you think Canadian house prices will just keep going up to infinity, by all means, buy buy buy.

If you think other investments will outperform a cheap house over the next 15 years, then don't buy.

-W

[A Fella from Stella]

With waiting, you might learn how to buy properties where the back taxes are the opening bid. Have you considered learning this process? You might buy something for $30k, invest $50k to fix up to rent out, and then execute the teardown when ready.