Name:   MartiniMan - Subject:   One caveat to this approach Date:   10/20/2016 9:13:41 AM

One thing to look very closely at is the actual cost to rebuild a house from the ground up.  When I insured my primary residence they had an appraiser determine exactly how much it would cost on a per square foot basis (~$130 psf) to rebuild and I was shocked.  Then I started to look at comparable new homes and the cost per square foot (when you remove the cost of the land) was about the same as they came up with.  And the real shocker is the cost to rebuild is more than the value of the home and lot combined.  Not sure if these economics hold true in the Lake Martin area but it is worth a look.  So my strategy if my house were to burn to the ground is to take the insurance money and buy another existing home and sell my lot.  Just doesn't make sense to rebuild.

So my lake house is 3,200 sf in size which using $130 psf to rebuild comes to more than the house is actually worth in the current market, including the land.  If you go on google and do a search you will see Alabama costs range from $80 to $200 psf depending on the contruction quality.  Unless you are going to be your own general contractor you can expect them to add around $15 psf for their services.