Are you thinking about buying a doer-upper?
Residential
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Residential
Start with the easy things first to narrow it down:
We suggest talking to your real estate agent and approach the council; they may be able to answer some of your questions. You wouldn't want to end up owning a property that will be tough to market when the time comes for you to sell.
More than simply bringing your vision to life, renovations have the potential to increase the value if you focus on prime areas such as kitchens, bathrooms and outdoor areas.
Decide whether it's worth it. When looking at the amount you will need to spend on a property, it's crucial to realise that the cost of the renovation may outweigh any savings you made in the purchase price.Keep an eye out for hidden costs and signs of problems which may require more than DIY handiwork to remedy, these include:
It is costly to move walls; it could also mean having to move electrical wiring and plumbing, all of which can add up very quickly!
This will help you to identify areas that need improvement. A property inspector will also note the property's condition as well as all work required. It's always better to overestimate costs rather than to underestimate them.
A lot of us scan Pinterest creating board after board of DIY jobs that we dream of getting done. Yes, it does cut costs doing it yourself but be honest with yourself about whether you have the skills or the time to do the required renovations. If the answer is no, then a doer-upper may not be for you. It may cost more than the upgrades are worth in value if you hire someone to do most of the work for you.
Yes, it will cost you more if you use professionals; it will also make the process move along faster. It is better, in the long run, to have the right consents in place and to have the work done correctly when the time comes to sell.
Make sure that you have a contingency budget worked into your renovation budget. You never know when you will have to face unexpected costs or address issues that you hadn't planned for.
How are you going to go about doing things while renovations are underway, will you try living in the property while everything is being done?
If a complete renovation is required, you may need to organise accommodation; or rental property on top of your mortgage repayments. This could increase your debt.
To work out whether a doer-upper is a worthwhile purchase for you, subtract the renovation costs from the home's projected market value, then deduct 5-10% more for potential complications and other possibilities - this should give you an idea of whether the project is something that is a good fit for you.
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