Existing structure value
Does the current structure have meaningful spatial, material, environmental, or economic value worth preserving? A house can be old without being valuable to the new program, or imperfect while still containing qualities difficult to reproduce.
Program mismatch
If the desired rooms, circulation, ceiling heights, daylight, structure, or relationship to the site fight the existing building at every turn, a renovation may become a sequence of expensive compromises.
Existing-condition unknowns
Concealed structure, prior additions, systems, envelope conditions, hazardous-material questions, and incomplete documentation can make renovation less predictable. Investigation reduces some uncertainty; it never makes an existing building blank new construction.
Site + non-construction context
Existing siting, zoning/land-use constraints, landscape, utilities, neighborhood context, and the cost/feasibility of replacement can change the answer. Appropriate legal/planning/design professionals handle determinations outside builder scope.
Design goals
If the primary goal is to preserve the relationship to a site or specific existing fabric, transformation may be worthwhile even when it is not the cheapest theoretical path. If the existing structure blocks nearly every priority, replacement deserves a real comparison.
Decision questions
What is worth keeping? What cannot be known yet? Which parts of the desired program fight the existing structure? What temporary/sequence work does renovation create? What would replacement solve—and what would it erase?