What You Should Know About Buying a Knockdown Rebuild for Property Investment

It’s not always easy to find the best house in the best location, which is why it’s always wiser to look for the worst house in the best location.

Buying a knockdown rebuild (known as a KDR), essentially means buying a property with the explicit intention to knock it down and build a new dwelling on the land.

Sounds simple enough, but there are still many things to consider before purchasing a home simple to demolish it.

Be mindful of costs

Depending on the type of home you want to build, it’s generally cheaper to build a new home rather than renovating an existing one (if there is a lot of work to do).  

But there are other costs associated with rebuilding that can add up if you’re not across them.

Demolition alone can cost between $10,000 to $35,000, depending on the site and what is currently there.

Construction time

In a previous post [What to Look For When You Buy a House and Land Package or Off the Plan] we talked about the thing to consider when buying a house and land package, which included the design and builder.

If you’re using a builder like Rawson Homes, their designs are fairly inflexible, so any modifications you make to the floorplan can ratchet up your building costs. Using an architect and builder may prove cheaper if you want a custom-built home.

You should also consider construction time. Some councils require you to comply with a pre-construction period of six months, while others can be as long as nine months. This means it could take anywhere from 12 months to 16 months to build your new home.


Unlike buying a house and land package, where all the approvals have already been granted to the developer, when you’re renovating or building a new home in an established suburb, you’ll have your “Not In My Back Yard” neighbours to contend with.

As soon as your development application (DA) goes into your local council, your neighbours will get the right to make a submission objecting to your proposed dwelling. And the council may decline your application on those grounds.

This means, you’ll need to go back to the drawing board and make changes to the design or negotiate with your neighbours. Some people will object to double storey homes that will block the view or sunlight on their property, or may impact on their own privacy (a balcony overlook your neighbour’s yard, for example).

There are lots of things to consider when buying a property, especially if you intend it as a knockdown rebuild. For help Investing in a brand new home or investment property in the Newcastle, Cessnock, Port Stephens or Lake Macquarie areas of NSW, contact EzyEstate.