How to avoid money pits while buying a renovation project house
23rd Sep '20 • By Rohit Mankame
If done right, renovating an existing project is easier and cheaper than starting a new one. This is because a fixer-upper gives you the freedom to remodel existing structures at an affordable price in expensive cities. However, an unwise remodelling project can cost you greatly. This is why you should adhere to the following professional tips that can save both your time and money.
An unwise, poorly planned remodeling project can cost you greatly. This is why you should adhere to the following professional tips that can save both your time and money. If renovated properly it will increase the value of your property. Here are our tips:
Make careful, cool calculations about the renovation project. Even as you shop for simple things, keep your analytical eye open. The best way to assess your home’s requirements and possibilities is from a value and logical standpoint.
Talk to Your Lender
It might be cheap to buy a dilapidated house, but don't think that means you're going to get a loan. It will not meet that standard with the lender's valuation if a property is in need of substantial renovations, and that may mean anything from a small delay to removing the entire deposit. Contact your bank / lender before you sign something to determine whether, at valuation time, a property you are considering will have hurdles.
Take Advantage of the Homebuilder Grant
Why not take it while there's support available? The Federal Government will give $25,000 to eligible Australians to build or renovate homes for a limited time, to boost the construction industry and keep our builders employed. Visit the Australian Government's HomeBuilder grant website to learn more.
Now could be the best moment to lock in and make your dream home even dreamier with overseas travel on hold.
Arrange a Pre-Purchase Inspection
Knowing what you're up to is the only way to stop spending burn-outs. Any sly animal nests, decaying stumps, DIY electrics will turn up for a competent renovation inspection. A bad inspection doesn't have to mean that you shouldn't go forward, but your goals, expenditure and timetable should be taken seriously and modified. This is also a very good opportunity to negotiate the price of the property before you buy.
When you want to buy a renovation project house, you should love the floor layout. It will be expensive to move load bearing walls. This is why you should avoid such tasks. If you don’t know how to identify load bearing structures, approach a professional! When you choose renovation project houses, start with the basement and understand the home inside out! Check for cracks in the pipes, exposed wires and foundation problems.
Contact the local council
In recent years, construction regulations have changed in many regions. As part of a refurbishment, you may face constraints on what you can do to the property and what you cannot do. Before you start, make sure you know what you need to apply for and when, and figure in the additional costs. A good builder or project manager will know just what is expected for the project's region and nature.
Analyse the Roof
Moving on, you should inspect the roof properly. If you don’t have the necessary skills, we recommended hiring a trusted roofing specialist to understand the roof’s needs. As you assess the roof, check for missing shingles, cracks and asphalt. Even the leader pipes and gutters should be positioned correctly.
Check for Smells
Don’t forget to check the renovation project house’s bathrooms. The washrooms should be analysed for structural damage and rot. It is quite interesting to note that sloppy showers can cause issues in the bathrooms and adjacent rooms. If the building is extremely old, you are likely to come across wiring and plumbing problems. Here are two common signs of trouble in old homes:
Aluminum wires can increase the risks of fire hazards.
Galvanized steel pipes are likely to develop sediments that can corrode and leak.
Last but certainly not least, you should stay away from homes with funky smells. Bad odor represents problems that can cost you lots of money and time. Indeed, these homes can cause various health issues too!
Do not Overcapitalise
The cost of a house renovation can be higher than what the home is really worth. The investment you bring into your new house should be less than the amount you will get if you sell it. You need to make sure the renovation is financially feasible, especially in a changing property market. Do your research: look at local revenues, interest in the city and changes around it. To have a sense of how much money you're actually adding, chat to real estate agents. The last thing you need is for your planned renovations to cost more than they add to the property's worth.
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