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Building a Custom Home: Teardown Lot vs Vacant Land

March 2nd, 2023

By Sofia Alonso

3 min read

Modern Farmhouse Style Custom Home by AV Architects and Builders in Great Falls Northern Virginia

As custom home builders in the Northern Virginia area, we know there are many factors to consider when deciding to design and build a new home, and even more so for a custom home.

If you don’t already own the lot that you plan to build on, you’re going to have to find and purchase one. This task can seem daunting to many people and is one of the main obstacles that stops someone from moving forward with their custom home dreams.

As an established design-build firm, we have been bringing our clients’ dreams to fruition for over 20 years. This experience has allowed us to identify the areas of the design-build process that are most stressful, such as lot and land selection. 

Many people don’t know that there are two main types of residential properties you can purchase to build your new home on. Those are: a lot with an existing structure on it and an empty piece of undeveloped land. 

There are pros and cons to both options and it’s important to consider this choice when planning for your new home build. In this article, we will review the main pros and cons of either option so you can feel confident choosing the best option for your new home build. 

What is a Teardown Lot?

Generally, a lot that has a house on it is less expensive to build on than an empty piece of land that's never been developed.

If you are planning to build a new home, the best lots for you are those with a teardown on them. A teardown is an older home that would require significant renovation to make livable and is better off at this point being torn down than spending more money than it is worth renovating. 

Demolition is a minimal cost in the grand scheme of a new build

Many people don’t consider lots with teardowns desirable because they think that the demolition of an existing house is going to be too costly. 

Generally, it costs $15,000 to $20,000 to tear down a house and it takes about two days. So if you are planning to build an entirely new home, then this cost is minimal if it means you can secure a lot in your desired area within your budget. 

Expert Tip! We suggest our clients use a deconstruction company like Second Chance during the demolition for a good cause and an opportunity for a tax write-off. When you donate to Second Chance they reuse and repurpose the materials in new and different ways in an attempt to reduce waste and divert items from landfills.


Teardown Lots Take advantage of existing utilities

One of the benefits of building a new home on a lot with a teardown is that the property typically already has access to utilities. All we need to do is disconnect the existing utilities, tear down the existing house, build the new house, and reconnect the utilities. Read on to see that this is not the case when building on an empty piece of land. 


Teardown Lots have a Cleared house site

Lots with existing houses on them typically have a cleared home site where the existing structure stands. This means that the area is generally cleared of trees and foundation is already dug for the footprint of the existing house, reducing the amount of dirt removal and excavation required for the new build. 

What is Vacant Land? 

Generally, an empty undeveloped piece of land is more expensive to build on than a lot with an existing house on it. 

This is because undeveloped land typically requires more extensive site work to prepare the property for construction. Some of this site work may include clearing trees off the property, creating a driveway, excavating, and bringing utilities to the site. All of that potential site work is collectively more expensive than the demolition of an existing teardown. 

If you're lucky, you may find an available empty piece of land with no trees, that is level, and ready to build on. 

The issue we find is that typically these seemingly attractive lots are still available because they face a topographical challenge that requires intuitive design to solve. 

As custom builders, we won’t shy away from a challenge. For us, it’s an opportunity to create something unique. But it is an important factor to consider when selecting your land, as it can significantly impact the potential site costs required for your project.

Should I Renovate or Teardown?

Sometimes people live in a teardown and the perfect lot for their new build is right where they are. 

If you've lived in a house for 30 years, it might be worth tearing it down and building new on your own lot since you have equity that you've been building on that property. 

Maybe you have considered renovating your current home and don’t think you should spend all the money building a brand new one. We say, if you want to change more than 75% of your home, then it is better to just tear down and build new.  

Should I Build my House on a Teardown Lot or Vacant Land?

In this article you learned a bit more about the pros and cons of purchasing a teardown lot or vacant land to build your new home on. 

Many people are not aware of the two options and their differences. It is true that building on a lot with an existing structure or teardown is more common since it is typically more affordable and there is simply less empty land available. Nevertheless, it is important that you now know about the options so you can be better prepared to make the right decision for your new home goals. 

If you’re still unsure on which option might be right for you or if you have questions about the custom home design-build process, contact us today. We are here for you throughout your custom new home journey!

Contact Us


9903 Georgetown Pike Suite 201
Great Falls, VA 22066
(703) 865-5065