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  • Carmel Homes

Tips for Buying a House to Knockdown and Rebuild

Updated: Sep 14, 2021

If you are looking to build a new home, finding the perfect plot can be tough. In many of the most desirable locations, vacant land is almost non-existent. And often, the locations where vacant land is available are either unsuitable or just not what you are looking for.

However, there is another way to build in the location you want – by buying a house to knockdown and rebuild.

Traditionally, most knockdown rebuild projects have been undertaken by existing residents. They are people who love their location and the life they have built there but need more from their property. In this situation, a knockdown rebuild gives the best of both worlds – a new home in the same location.

More recently, new home buyers have started seeing the potential benefits of a knockdown rebuild project. Increasingly, they are considering investing the extra time and effort (and money) to get exactly what they want.

But finding a place to knock down and rebuild can be tricky. Properties with great development potential are still relatively scarce, and there is growing competition for them. It can also be hard to see past the existing structure and imagine what a new home could look like.

Here we share our tips on picking the perfect property to knockdown and rebuild. We look at what you should be focusing on and what to watch out for. We also share the best places to find more information and where to turn for advice.

Get to know the area

Ultimately, the whole point of buying a house to knockdown and rebuild is to secure yourself your ideal location. As such, it is worth working out exactly where you want to live.

Start by thinking about the broader area you would like to live in and why it appeals to you. If you have not done so already, spend some time there to get a feel of local life. Visit the shops and cafes, walk through the parks, drive around the streets, and generally get to know the area.

As part of this, pay close attention to the areas that you most like and dislike. Take note of any streets you really love or local landmarks you particularly enjoy. Also, make a mental note of any areas you are less keen on and would prefer to avoid.

Having a clear view of this should help you target your search. It will also give you something to assess potential properties against and could even make choosing a place easier.

Have a design in mind

It is best to start your search with some idea of the size and style of house you would like to build. This will help you work out the minimum amount of land you require and any other site features you need. It will also help you spot any potential issues that could mean you need to change your design.

Having an idea of what you want your new home to look like will also help you picture it within the streetscape. While you may not want your property to look like the neighbours’ place, it should still feel like it belongs. Also, if there are similar homes in the area, the Council will be more likely to approve your planning application.

Look for a property in poor condition

When buying a house to knockdown and rebuild, you are essentially just paying for the land. As such, you want to try to find a place where the land value makes up most of the price. This means you will be paying a minimal amount for the existing structure, which you are just going to remove.

With this in mind, you will generally be looking for older properties that have not been well maintained. Ideally, you want to find a place that would require significant time and money to restore. This will generally mean that you will only be competing with other knockdown rebuild buyers, which should help keep the cost down.

Make sure there is no heritage overlay

If you are looking at older properties, there is a chance that some will be subject to a heritage overlay. While these are critical to protecting our architectural history, they can be a major issue for knockdown rebuild projects. As such, it is best to confirm that any property you are considering is not covered by heritage protections.

That being said, if you are flexible with your design, it may be possible to work with a heritage overlay. This could add extra detail to your new home as certain elements of the existing structure may need to be retained. It could also help keep the price down as most other people looking for a knockdown rebuild will avoid heritage protections.

Understand the other planning restrictions

Heritage overlays aren’t the only restrictions you might have to work around. Bushfire and flood management overlays are prevalent in areas prone to these issues. Vegetation protection and minimum green space requirements are also quite common.

While none of these should stop your knockdown rebuild plans, they could impact your design. As such, it is best to be aware of any such restrictions before committing to purchasing a property. To check this, contact the local Council or visit the Planning Victoria website.

Know your budget split

There are two phases of expenses you will need to account for – the property purchase and the knockdown rebuild work. It is important to balance these to make sure you can achieve everything you have planned. The last thing you want is to have to compromise on the build because you overspent on the land!

Getting this balance right is all about doing your research.

First, look at how much it will cost you to buy a suitable property in your target area. When calculating this, you should look at recent comparable sales and include all other buying costs (e.g. legal fees, stamp duty, etc.). As always, if you are unsure exactly how much something will cost, include the higher end of the likely range in your calculations.

Then, work out your rebuild costs. This should be based on your proposed design and include all the work you want to do (e.g. landscaping, driveway, etc.). You should also include a contingency amount of at least 10% to cover the unexpected costs that invariably pop up.

Once you have done these calculations, the estimated cost will hopefully suit your budget. If not, you may need to adjust your plans to make sure you are not left short. Generally speaking, it is easier to find savings in the purchase, but there could be cost savings to be found in both phases.

Engage your builder early

Your builder can be a great resource throughout the property hunt. A good builder will work with you to develop your rough design and come up with some key requirements. They will also review properties you are considering and provide advice on their suitability based on your plans.

With this in mind, it is worth starting the search for a builder early in the planning process. Ideally, you should look for someone who knows the area and has experience in knockdown rebuild projects. You should also try to find someone that has delivered similar builds to the one you are planning.

Consider making a contingent offer

As part of your due diligence, there are certain tests you should have done before committing to purchasing a property. However, some of these may not be able to be done before you put in an offer. This is where a contingent offer could help – it gives the seller some certainty and allows you some flexibility.

For example, the soil quality can have a significant impact on the design, so it should be tested prior to purchase. However, as this can be quite an invasive process, many sellers will be uncomfortable allowing such a test without an offer. As such, putting in an offer subject to feasibility could help the process proceed.

It is important to note here that, in a competitive market, you may need to move quickly. While a contingent offer allows this (you can put in an offer sooner), they are not seen as particularly strong. As such, you may need to be willing to take a little calculated risk to secure the site you love.

Keep an eye on the future

One of the biggest benefits of a knockdown rebuild is that it allows you to create your dream house in your ideal location. You can design and build whatever you like (within reason) and make sure the property truly suits your family’s needs.

With that in mind, it is worth thinking ahead and planning for what you may need in the future. For example, you may need space for a growing family or want to limit steps to cater to decreasing mobility. This is particularly important if you are planning to live in your new house for the foreseeable future.

It also pays to consider the potential resale value. As the property will usually be your largest asset, you want to be sure you are making a good investment. As such, you want to make sure it is comparable to neighbouring properties and provides capital growth potential.

Need help planning your knockdown rebuild project?

As one of Melbourne’s leading knockdown rebuild specialists, Carmel Homes knows how the process goes. Whether you are looking to redevelop your current home or buy a knockdown rebuild, we can help. Contact our friendly team today to arrange your free design consultation.



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