Building new VS Rehabbing?

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I posted this topic on the rehabbing forum, but it didn't seem to get much attention.

What I was wondering is as follows:

Say you find a piece of land with an older, smallish, run down house on it selling for a low price. To maximize profit, would it be ideal to rehab the existing house and fix it up or to tear down the house, excavate, and build a new bigger house from scratch? I know the latter is much more involved an more expensive, but when it comes to selling, could the newly built couse be more financially rewarding in the long run?

I'd like to know this because I am thinking of starting a project really soon.

Thanks,

Aaron