Due to the recent trend and home renovation shows, more and more people and choosing to improve the value of their home. There is a renovation boom at the moment, with house prices on the way up and no signs of slowing, it makes complete sense to buy on a budget and improve with capital. Let’s go over some of what you need to consider if you choose to go down the path of buying to renovate.
Calculate your budget
The budget is the single most important detail you must work out and get right from the beginning; otherwise you are setting yourself up for failure. Buying to renovate requires you to first budget for the initial purchase of the property and second to calculate a budget funds for the renovation portion. Home renovation can be as simple or as complex as you want it to be, a few cosmetics changes here and there and a fresh coat of paint can do wonders, whilst knocking down walls and building an extension requires more planning and consultation and inevitably increases the budget. Working out the costs involved to complete your renovation is important to prevent cost blow outs which can leave you with an unfinished product when the funds run out.
Consider your capabilities
Purchasing a house to renovate can be a very rewarding process; the sense of achievement upon completion is a satisfying feeling. However, making the decision to purchase and renovate does require a huge commitment, it is unlike purchasing a home that is ready to move in with nothing more to do. You need to consider your skills and be realistic about your renovation plans, not to mention the time and patience required, the willingness to live in an unfinished home whilst renovations are going on. Therefore, take careful consideration to the extent of your renovation works when inspecting potential properties to buy.
The right location
Choosing where to buy can make a big difference in the property’s value when renovations are complete. A safe technique that has been around for many decades is to buy the worst house on the best street. It is a much safer approach and often much easier to bring an average looking home up to the market value on a good street rather than renovating one in an average location beyond the location’s asking boundaries.
Cosmetic renovations
Renovation works can consist of both cosmetic and structural repairs, both can improve the quality of the house but it is only the cosmetics that people can see. When purchasing a house to renovate it is important to be aware of any structural repairs that may need attention. Structural repairs can be expensive and often require professionals, furthermore money spent on structural repairs do not generally increase the home’s value but are a necessary repair to get underlying problems rectified. Cosmetic repairs on the other hand are always visible and add to the overall value of the property when done well. Upgrading the bathroom or kitchen can visually transform a property and increase market value, whereas a termite infested structural beam must be replaced resulting in little or no rise in the property’s market value. Therefore, when looking at buying a house to renovate, consider getting a building and pest inspection report by a certified professional.
