Before purchasing a home to renovate, you must think carefully. Ask yourself: Will this house be worth the work I put in?
To find your answer, follow these three steps.
1. Add up the costs:
First, consider everything that needs to be done to the home. Always assume that more work will be required, rather than less. Add up all the estimated costs for materials and labour. If you plan on doing some of the work yourself, factor in your own labour costs as well.
Seeking the services of a professional building inspector helps a lot during this step. Their expertise and objective advice can ensure you're not missing any issues, and therefore costs, hidden behind the walls or under the roof.
2. Calculate the final value:
Regardless of whether you plan to sell the house or live in it, you need to estimate what the finished value will be. Search for comparable listings that have sold in your area to get a rough idea of what you could expect. Alternatively, ask a Century 21 Real Estate agent for their opinion.
3. Find the difference:
Finally, subtract the total estimated costs from the estimated final value. Subtract an extra 5-10% for unforeseen issues. The number you get should be the absolute upper limit of what you offer. Anything more, and what appears to be a great deal can easily turn into a money pit.
If that final number looks good to you, then that fixer-upper may be just what you've been looking for. Time to start planning your renovation.
Need expert property advice? Contact Century 21 Property Connect today - 024365 4898.
Disclaimer: The opinions posted within this blog are those of the writer and do not necessarily reflect the views of CENTURY 21 Australia, others employed by CENTURY 21 Australia or the organisations with which the network is affiliated. The author takes full responsibility for his opinions and does not hold CENTURY 21 or any third party responsible for anything in the posted content. The author freely admits that his views may not be the same as those of his colleagues, or third parties associated with the CENTURY 21 Australia network.