One man’s teardown might be another man’s goldmine. Deconstruction is the process of taking part an old house and salvaging as much of it as possible, so that the materials can be re-used. Deconstruction is a greener alternative to building demolition. There are a few ways to make money from deconstruction. Obviously if you pay someone to deconstruct a house for you, that deconstruction contractor is going to be paid a fee for his service. However, think about other ways that deconstruction could be profitable.
If you knew you could make money selling the materials (old cabinets or wood from a barn, for instance), you could offer to deconstruct part of a property for free. If the property owner was going to demolish it anyway, it is just less work for their demolition contractor and waste they’d have had to take to the dump.
If you bough a lot with a house on it that you knew you were going to tear down, deconstruction might make sense for a few reasons. You’d have to analyze how much more it would cost to deconstruct vs. the cost to demolish, then decide if it offsets these possible benefits: a potentially large tax write-off from donating the materials to a 501(c) non-profit (one couple in Northern Virginia were able to generate a $51,000 tax benefit from deconstructing a 1950’s 2 bedroom house), less waste to haul to the dump, and possible re-use of the materials on their new home construction project.
Something else that might be overlooked is the points enhancements available when chasing a LEED or other eco-friendly home rating for the new house; some buyers were pay a premium for this types of home. There are also some non-monetary benefits that might appeal to some, like reducing their carbon footprint and greenhouse gasses, creating “green collar” jobs, and helping non-profits that sell recycled supplies to generate money (like Stardust Building Supply in Phoenix).
In theory, you could use deconstruction as part of an real estate investment strategy to flip lots. Let’s say you found a property selling for lot value or even below lot value because it is a teardown. You could buy the lot, deconstruct the house, then re-sell the lot for the same price you paid. The income from selling or donating the deconstructed materials would be your profit. This is probably a pretty narrow opportunity due to the transaction costs involved when buying and selling.
If you are going to demolish something anyway, then at least consider deconstruction.